My limited company ceased trading in Dec 2010 after 18 years of business. I had debts of 20 000 to Tax and Vat. I informed my accountant in April 2011 so that he could submit my accounts. I paid off my bookkeeper in Feb 2011. I moved from England to Scotland to start again.My bookkeeper was also the secretary of my limited company.I filed for liquidation but was refused because of outstanding debt to Vat and Tax ( + £3000 to the bank).I heard nothing more from my accountant or bookkeeper until Dec 2011 when the tax was due on my limited company that has ceased trading.At this point my accountant said that he did not have sufficient information from my bookkeeper to file my accounts and that I would be subject to a penalty on the 31st Dec. My bookkeeper have washed their hands of me saying that I had left for Scotland without finishing all the paperwork required for them to process the accounts ready for the accountant.They suggest that I get a new bookkeeper in Scotland to do my books all over again for submission!I am now about to incur another late penalty for not having my accounts filed by 31st January.My accountant says that if I am lucky they will have struck off my company at company house and that will be the end of it but I wonder I am still liable for debts even if the company is struck off.Can you advise?
I am based in the UK
Where was your company? England? Are the debts due to HMRC?
yes they are due to hmrc and i live now in scotland though my business was then in england
Ok thanks. If you fail to file accounts or returns then eventually the registrar will strike the company off. In theory as the responsible director you could be liable for breach of the applicable Companies Act provisions but in practice they do not normally do anything .A director is not generally liable for the debts of a company just because he was a director but if the liabilities are to HMRC for PAYE then you may be personally liable as a director for the unpaid amounts and if you owe VAT they may not permit you to be VAT registered unless you provide security for VAT.
I am not sure I understand you completely.I am now a director of a new limited company that may in time be required to become VAT registered once the company income reaches a certain threshold. Could I be refused VAT status at this point because of my previous company being struck off?
Yes if HMRC become aware that your previous company defaulted on its VAT obligations they could ask your new company to put up security for its VAT obligations. They cannot actually refuse you VAT status because you may be required by law to register but they can make pay on account for example.
So in the final analysis it looks like the most pragmatic thing for me to do is walk away from the debt by not filing any accounts. ?Or am I missing something?
I agree. Certainly that is what I would do. If you file accounts you will be fined. you have nothing to gain unless you have the funds to pay all the debts off. You could put the company into creditors voluntary liquidation but you would have to fund an insolvency practitioner to do that.
30 years experience in business law and related topics such as employment law