Starting Again

[timepiece]

A good friend of my wife's has a pretty successful service based business, but has got herself into a bit of a grim situation. She has mild learning difficulties, and from the outset employed an accountant to look after that side of the business, but it seems the relationship has turned bad. Every time she asked the accountant what she could claim for and what she could not, the accountant stated that it was tax evasion, while at the same time refusing to advise her.

This situation has gone on unchecked for a few years now, and she was so anxious about everything that she let things slip. She now has no idea what has been submitted on her behalf, what she owes, and where she stands.

It was suggested by a third party that she start afresh, employing a different accountant, while at the same time taking on a part time book keeper to do the week to week stuff.

She has a Facebook page and a website that she wants to keep, and she wants to stay in her current premises and trade under her existing name. The business is a partnership, she and her husband are listed as the owners.

Can she start again, as a Ltd Company, with the partnership selling the assets to the new business (domain-facebook-fixtures etc)

If so what is the best way to go about this?

Can you advise an alternative route?

 

[Scalloway]

I would recommend getting a new accountant who is more understanding. She should give the acountant authorisation to deal with HMRC and find out where she stands with them.

Hiring someone to look after admin sounds like a good idea too.

 

[Homer J Simpson]

Agreed with the above, it seems she only needs to chance accountant and maybe ask the new one to review old submissions. It's sounds a little over the top to close one business down and start all over again due to not getting on with the accountant.

 

[timepiece]

One of her worries was liability/back tax/penalties. I first became aware of the situation when her accountant informed her that she had to file 2 sets of accountants within a few weeks of each other, and she asked my opinion. I have not seen her accounts, but I know that she has not been keeping on top of the situation, and obviously her accountant has not. The worry is that the whole thing could get very expensive.

 

[Scalloway]

Unfortunatelly as a sole trader she can't escape penalties by starting new with a limited company.

 

[timepiece]

Is there a "spongebob" plan for someone who just wants to wipe the slate clean and start afresh if they are not a limited company?

 

[Scalloway]

It's called bankruptcy. According to Spongebob it's not too painful if you look at it that way.

 

[timepiece]

Seems whatever she does will be painful, but bankruptcy seems a bit extreme.

 

[Scalloway]

The best thing to do is get a sympathic accountant and work things through.

 

[MikeJ]

Unfortunatelly as a sole trader she can't escape penalties by starting new with a limited company.

Or "fortunately" if you're on the side of people paying their taxes. No offence to the OP.