VAT debt on Limited Co

[Shazzaw]

Hi all,

Back to my brother!!

He has a Limited Company - which his accountant is in the process of shutting down - and owes VAT of £15K. Can he personably be held liable for this or will it be written off due to the Limited Company being shut down with no assets??

Thanks in advance for any help I can pass on

[TUTTSI]

Re: VAT debt on Limited Co

According to my hubby who is an accountant, says that as the debt is for the Ltd Company, your brother is not personally liable for this debt, so tell him not to worry.

[Amethyst]

Re: VAT debt on Limited Co

Is it being formally dissolved ?

[Amethyst]

Re: VAT debt on Limited Co

There we are then

[Shazzaw]

Re: VAT debt on Limited Co

Thanks all - he phoned me at 7.00 this morning having not slept a wink last night he was so worried he'd be held personally liable.

Thinks he'll be v.relieved and will pass on his thanks from him to you all!!

Just out of interest he also has a business loan outstanding of £13k which he believes was secured on his previous property before he moved - we'll call it Property A. He has now moved to Property B without signing any additional pepaerwork regarding the business loan.

I'm assuming he'll have to somehow find a way of paying this although he is desperately broke. Do you think his bank will be willing to offer him a loan to repay this debt once they become aware that the company is closing down??

Any advices from your hubby Tuttsi!!

[Sapphire]

Re: VAT debt on Limited Co

Hiya, this business loan did your brother sign a personal guarantee for it, or was it a business loan to the company of which he was a director. I think that you'll find two different scenarios there.

[TUTTSI]

Re: VAT debt on Limited Co

Has your brother given any personal guartees to the bank regarding the loan in the event that the company defaults, ie goes in to liquidation.

Was the loan agreement in the name of the company or his name personally.

It was surprising that when your brother moved, nothing came up at that time! unless the debt was paid off when he moved.... just a thought!!! if he still has the paperwork from the solicitors on that move that might also throw up some light on this.

In these circumstances it would be a good idea for him to do a search of the land registry for both properties just to see whether the bank still have their security coverered. It may well be that if he has given personal gurantees this would be an over riding factor anyway. ie if he has given a personal gurantee then regardless he would still be liable for the loan balance.

Another question, has he been paying the loan back and upto what date and has he incurred any charges!! just a thought, and how much of the £13K loan is still outstanding. He must have received statements I guess from time to time!!

xxx

[Shazzaw]

Re: VAT debt on Limited Co

Hi guys,

Hold fire on this one for the time being as it appears it's not a loan after all but the £13k is what he's overdrawn on his business account.

He thinks he may have had to sign a personal guarantee to obtain the overdraft but needs to look for the paperwork.

Will update once I know what he's signed - if anything.

[WendyB]

Re: VAT debt on Limited Co

The VAT on the ltd co shouldn't be a problem, thats the whole point of a limited company, they can only take what belongs to the business, assets etc such as furniture, computers and so on. But believe me if there is anything to take, then the Revenue will take it. If it was as a sole trader, they could take everyting, all they are obliged to leave is the tools of your trade and the clothes you stand up in.
If he's signed a personal guarantee then he would be liable for the overdraft, the personal guarantee would override the limited company.