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Alex J.
Alex J., Solicitor
Category: UK Bankruptcy Law
Satisfied Customers: 3497
Experience:  2 Years Insolvency Litigation
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So my partner is a Dr registered with the GMC. He set up a

Customer Question

My partner is a Dr registered with the GMC. He set up a limited company working as a Dr for the NHS. Through ill advice from his accountants his company is now insolvent. He cannot afford his corporation tax. To make things worse he now works as a full time NHS Dr and earns less than half than he previously did. Will he lose his GMC registration if his ltd company is forced into liquidation.
Submitted: 1 year ago.
Category: UK Bankruptcy Law
Expert:  Alex J. replied 1 year ago.
Hi
Thank you for your question and welcome.
Has your friend personally guaranteed any debts of the company?
Kind regards
AJ
Customer: replied 1 year ago.
No he has not its a ltd company
Expert:  Alex J. replied 1 year ago.
Hi thank you as long as he is not personally bankrupt or has not been disqualified as a director- the company insolvency should not affect his registration. I am just checking the exact reference of legislation on this for your information - I will post this shortly. kind regards AJ
Customer: replied 1 year ago.
Where can I check if he is personally responsible, he's worried he may have been advised to sign something. He's not native British (he's Italian) and so totally believed everything he was historically advised. This is a very stressful time for him. He cannot afford to take out a personal loan to cover the debt incurred for corporation tax. He has paid the VAT due this week
Expert:  Alex J. replied 1 year ago.
Hi
Thank you.
The corporation tax is a debt of the company not him personally. Have HMRC asked him to sign a personal guarantee?
Kind regards
AJ
Customer: replied 1 year ago.
No they have not. The money is due to be paid now but there are little funds in the account to cover it. The umbrella company paid for an invoice twice early last year. They have reclaimed the money from the account they held for corporation tax. He used to earn twice what he does now so can no way afford to take on additional debt at this time
Expert:  Alex J. replied 1 year ago.
Hi
Thank you.
The issue I have is a company is a distinct legal personality generally speaking a person (as a director or shareholder etc) is not personally liabile for company debts (including any tax which is a debt) unless they have personally guaranteed them or have committed an offence under the companies act or insolvency.
Considering can you tell who is the demand for payment to? Is it addressed to the limited company? Has the limited company stopped trading?
Kind regards
AJ
Customer: replied 1 year ago.
The demand is on the companies name. He now works full time for the NHS so little opportunity to do locum work.
Expert:  Alex J. replied 1 year ago.
Hi
Thank you.
What he needs to do is protect himself from personal liability. The main offences that incur personal liability under the Insolvency Act are trading the company while knowing or ought to having know that it was insolvent or acting in the detriment to its creditors. The insolvency service accepts that a defence to this is taking professional advice and following it. What he should do is go and speak to an Insolvency Practitioner about liquidating the company and avoiding personal liability.
As a separate issue if his accountant advised him negligently he should make a complaint to the accountant he maybe able to make a claim for damages if the advice caused him losses.
Kind regards
AJ

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