Vat and corporation tax

[Steben]

Hi after some advice I started working for a agency 18 months ago a local job driving they told me to set up a ltd company and put me in touch with an accountant to set it all up and paid them 1800 for the year everything was going fine until the job moved 6 months ago now it's 100 miles each way to work so been staying in hotels and travel costs I have had to use the money from my taxes and currently haven't the money left to pay them I spoke to my accountant and told him my predicament and told him I needed to stop working as I was adding to the debt every week he said not to leave myself without a job but if I carry on my bill will be getting bigger they told me I can't close the company until the end of my 2 financial year so I have to keep paying the accountant until then just getting lost with it all and just need a normal job where the employer takes my taxes and advice would be gratefully accepted by the way the vat bill is around 3000 and the company tax is 4500 for last year

 

[Scalloway]

I would say that you are probably running the risk of trading while insolvent and should stop using the company immediately. 3 months after ceasing trading you can apply to have the company struck off.

https://www.gov.uk/strike-off-your-company-from-companies-register/overview

 

[Newchodge]

There is absolutely no reason why you 'can't close the company until the end of your 2 financial year'. Who told you this?

 

[Steben]

The accountant told me this but I wasn't sure if it was just so I would keep paying his fees

 

[Steben]

I paid my last vat bill on my credit card and I probably have enough on it to pay this 1 but I will struggle to pay it back and just would be getting myself into further debt

 

[Scalloway]

Then stop. You have no personal liability to pay debts for the company.

 

[Steben]

So what your saying is just stop working and find a normal job but what would I tell Hmrc and what actions would they take against me I have no assets only my house

 

[Scalloway]

You said in your first post you were operating through a limited company. A limited company is a completely separate legal entity from its owner. The owner's liability for its debts is limited to the money they put in. This is why it is called a limited company.

So HMRC will not come after you for your house. They can only come after the company.

And yes get another job ASAP.

 

[Steben]

I know what you mean it just doesn't seem right that I have had the money
It's just hard to get my head around that it's the company's debt
Surely hrmc will not just let it lie

 

[StevensOnln1]

HMRC have no powers to pursue you personally for a company debt. They could put the company into liquidation but that seems unlikely given the figures involved if there are no assets to cover the liquidator's fees.

Make sure you write to the accountant and tell them you don't want them to carry out any further work as the company would not be able to cover their fees.

 

[Steben]

So do I inform hmrc that I can't pay it at the moment will be bill get bigger I had a letter saying they would add a percentage charge on it by the way I do appreciate the responses

 

[Scalloway]

I would go to this thread and read what Spongebob has to say. He is the forum expert on companies like yours going bust.

http://www.ukbusinessforums.co.uk/t...ich-to-pay-an-insolvency-practitioner.316523/

 

[Steben]

Thanks for the help