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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hi there, I had just my very first end year accounts completed

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Hi there,
I had just my very first end year accounts completed and filled with HMRC. I have to pay corporation tax of about £11700.00 by tomorrow. But I did not leave the money in account and I am only able to pay £1500.00 now. I was not aware of this payment until now as my accounts are all done online, I only have to put in my expenses, payments, invoices and withdrwales etc online and I will be advised when to pay what. I have looked up the HMRC internet site and it is possible to have the coporation tax payment delayed or be paid in 6-12 month instalments.

My question is if I contact HMRC should I tell them what was happened or will it be seen as illagel that I did not leave the money in account? Or could someone advise how to approache HMCR?

I. Kelling

It's not illegal to draw money out of a company bank account as long as it is accounted for as salary, dividends or repayment of money owed to you by the company which are really the only ways drawings can be accounted for. However, you should really leave sufficient money in the account to pay the company's bills including corporation tax to avoid situations such as the one you find yourself in now.

I'm not quite sure by what you mean by "I was not aware of this payment until now as my accounts are all done online". HMRC would have made you aware that you would have corporation tax to pay nine months after your year end if you made a profit and you would be aware of how the company is doing throughout the year of trading, ie trading at breakeven, a profit or a loss.

If you don't have an accountant, I'd recommend that you appoint one. A decent one will ask for your accounting records in good time so that you don't find yourself with little time to find the money to pay your tax bill.

You should call the HMRC Business Payment Support Service to try to agree a payment plan with them, today if possible. You shouldn't tell them that you have drawn most of the money out of the account as that won't help. If you have an accountant they can contact the BPSS for you. The BPSS contact details are here.

I hope this helps but let me know if you have any further questions.
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