Advice on Liability Orders

[bob247]

Firstly, I'm new so a big hello to everyone. For those who have made it through the turbulent times, congratulations. To those, like me, just starting out - I see it as the beginning of the end of worry and stress. Life has just started to improve.

I wonder if you are able to answer one question for me. I’m about to go bankrupt with large debts, no income and virtually zero assets. I have a question about my ongoing liability.

My company is about to be wound up with HMRC & Companies House as the sole creditors. During the 3 years I operated this company as a Director I was forced to withdraw more money in dividends than I should due to personal financial pressures.

I owe 3 years personal tax (probably £30k).
The company will die with debts of circa £50-60k of corporation tax owing and £5k VAT.

If I file for bankruptcy before any liability orders are raised are HMRC still able to pursue the repayment of unpaid taxes

a) During the bankruptcy period?
b) After the bankruptcy period?

What advice would you provide in relation to this. I want to cooperate as fully as I can but do wish to see an end to being chased for cash and to wipe the slate clean.

Many thanks for your advice

Bob

[Amy]

Re: Advice on Liability Orders

Are you asking if your council tax will still be payable once you are bankrupt?

[WendyB]

Re: Advice on Liability Orders

I think Bob means VAT and Tax liabilities. And I'm sorry Bob but I don't know the answer to that. But I think it's probably yes, during the period of the bankruptcy any income goes to pay off debts, doesn't it? You would need to check with your bankruptcy practicioner and get it sorted before you go bankrupt as to what your responsibilities will be.

Are you sure that your VAT liability is only 5k? As if your corporation tax is 50 k then that would suggest quite a high turnover, which would probably mean more than 5k in output tax, unless you also had high input tax to reclaim?

[bob247]

Re: Advice on Liability Orders

Yes these are Corporation Tax & VAT. Although it was a limited company, I was acting as a consultant with a decent income of £110k + VAT.

I paid my VAT quarterly but missed the last quarter

However, my Corporation tax for the previous year has yet to be paid and I'm estimating the total value of corp tax due including everything earned up to end of Feb 2010 when it dried up.

Now, as I don't have £3.5k to wind up my business I was going to wait for one of my creditors to issue a winding up order (either Companies House or HMRC).

What are your thoughts?

Thanks

Bob

[SickotheCSA]

Re: Advice on Liability Orders

Having gone through a Bankruptcy myself last year, I can only tell you for sure that any Income Tax liability up until the date of bankruptcy is written off as such......not sure on the others although if they are in the name of the LTD company I am pretty certain that they will to.......the loss adjuster will be able to advise you better though.

Good luck

[labman]

Re: Advice on Liability Orders

Just noticed - this thread is over three years old! I suspect it will be sorted one way or another by now.

Useful info to know though SickoftheCSA - thanks!