started Spongebob how to proceed with HMRC

[vala]

Hi
Probably like many people who look at this forum I feel like Im in the middle of a storm and there seems no end to it. If anyone can help on any of the issues Im facing I’d be very grateful.

I’m the director of a one person limited company. I do consultancy work on short term contracts. When the works there it can be lucrative, but over the last 2 years the work has been drying up, until at this moment when I cant find anymore contract work and I’m having to look for a new career.

I have no savings, I have no personal assets, I rent my house.

The finances of the limited company became so desperate that it ceased trading in March and followed the ‘spongebob plan’ by sending out letters to creditors who are HMRC VAT and HMRC Corporation tax. As I cant afford an insolvency practitioner to close the company and would hope to eventually get it struck off.

My company owes Corporation tax of £9000 for year end Jun 2015. My accountant submitted these accounts to the HMRC. And there is also a £10,000 directors loan which HMRC said was overdue and increased the corporation tax due

My company owes VAT for £3000 for period end Dec 2015. This was submitted by my accountant.

My company had to stop using the accountant in January because it could not afford to pay them anymore

For the tax period July 1st 2015 until March 2016 when it ceased trading , the company would probably owe an extra £8000 Corporation tax, although accounts have not yet been submitted to HMRC or Company House

For the period Jan –March 2016 the company would owe an extra £2000 in VAT to HMRC, although this has not been submitted yet

I still owe the £10,000 directors loan, although there is very little chance I can pay it until I start working and I could then perhaps pay in instalments.

HMRC VAT have got in touch with me and sent a form for deregistration for VAT and they want me to input the VAT figures from Jan 2016 until March when I ceased trading.

The £9000 Corporation tax was due last week and I expect them to be in contact soon.

The company has no assets. (well apart from the DL , which is not going to get paid any time soon) The company is registered at the house I rent.

My real questions are; as I follow the spongebob plan

1) do I fill in the deregistration VAT form?
2) Do I submit my company accounts between Jul 2015 and Mar 2016 to Company House and the HMRC Corporation tax dept?
3) Is there anything Im doing that is really stupid?

Thank you for reading this. Im sure it may seem that with the income Ive had through the company and the money Ive overspent in the company, that I should have managed it better. I agree, but unfortunately I haven’t. I have had so many family problems over the last couple of years I wont bore you with, but they have cost me dearly. The fact that work has dried up for me now has been the straw that broke the camels back. So apart from you good people on this forum Im working by myself in the dark now.

thanks
Vala

 

[StevensOnln1]

1) De-registering would stop any further penalties building up for not submitting future VAT returns.

2) Accounts and corp tax return for July 2015 to June 2016 won't be due until around March 2017 and the company may not even exist by then. You're not likely to gain anything by trying to produce them yourself when the company can't afford the accountant's fees to do the returns and there is no requirement for you to pay for this personally.

 

[Spongebob]

It sound as if you've done everything correctly so far. You might as well send in the VAT deregistration form seeing as though you have it, but it is of minor importance. Any penalties HMRC add to the company's debt are going to remain unpaid anyway, so it makes no real difference.

Don't bother with submitting any further accounts etc.

Your main priority is to start earning a living again. Channel all your energies into this and put the company to the back of your mind. What will be will be and it will drag on for some time yet.

Always remember that you are untouchable. Your only personal liability is the directors loan and as you have no assets there is little anyone can do to recover it. Ultimately you can just go bankrupt and the debt will vanish, together with any other personal debt such as credit cards etc.

You are in a very strong position.

 

[vala]

Thanks StevensOnln1 and Spongebob, your advice is a lot of help. I'm trying not to put my foot in it, by doing something stupid.
And thanks Spongebob for the overall structure of the plan in your 'sticky'. Its very much appreciated

 

[emufeet]

Hi Vala, just wondered if there was any update on the situation? I am in a very similar situation.