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In a huge mess with the Inland Revenue, what do I do?(45 Posts)
Very long story but to cut it short - ex-h started a business doing IT development because he thought he was wonderful and could make millions. He registered as an LTD and vat registered to make himself sound better to the companies he dealt with. Officially he's been trading since about 2000 and hasn't wound up the business but in reality he had about 5 contracts and overall just earnt lots of debts.
Problem is he made me a partner and made out I ran the company with him and, because of the situation, I went along with it but in reality I didn't have anything to do with it and was working full time at the time.
I thought he'd been doing all the paperwork and anything necessary (silly me) but recently the IR have got in touch with me to say they estimate we owe thousands in tax and loads more in fines and they're expecting returns for the past 5 years from me.
Have explained the situation and offered to give them the bare details I know of where to find him but they made it clear they'd already been down that route and got nowhere. I also explained that I haven't a clue of the figures concerned or anything but they still want me to go in tommorrow and see them.
Can anyone make any sense of all this and tell me why they're insisting on seeing me in person and what on earth is going to happen?
Have spent the past year having to sort out debts and thought I was getting him out of my life and getting things sorted, now I feel like the past few years have just dumped me in a load of sh*t that I'll never get rid of.
Sounds like they're chasing you because you're available and he's not. Think you should see a solicitor pronto.
Agree with the last post, be completely open and honest with them and they'll help you out of the mess you appear to have been lomped in....sorry to hear he's done this to you, fingers x'd it all goes ok.
crikey WSK - what a nightmare. Do you recall what role he made you in the company? Was it a Joint Director or Company Secretary? There are different responsibilites associated with each - see here - though I'm not sure how it applies to responsibility for tax.
Did you actually sign anything - could there be the possibility that he just said he made you a partner?
I'd be tempted to stall the IR - say that tomorrow is too short notice - offer them a future date and in the meantime get some legal advice.
Good luck - I can appreciate how worrying this must be - FWIW me and dp got in deep shit when we first started out in business through lack of knowledge about what our responsibilities were about tax and Companies House. We had to spend loads on an accountant and a lawyer to sort it out. I don't want to be alarmist, but I really think you should get some professional advice.
if he registerd the company, I assume your name is not on the papers as you'd have received an income tax form from the first year.
just be honest and tell them you had nothing to do with his income. i assume you didn't sign on anything or were put down on the forms as a partner. if anything, why do they not contact his bussiness partner?
it sounds strange but , at the end of the day, you've done nothing wrong.
have you any records of bank statements in your name to prove what your income has been for the past 5 years?
God phatcat, that sounds like a nightmare! Am tempted to stall IR but have had to already because dd was ill, she should be ok for a trip out tommorrow and would rather know what the damage is else I'll be worrying about it. Will definitely get some legal advice after I see what the situation actually is.
Thanks for all the advice, he registered me as Company Secretary and I must have signed something but it couldn't have been much else I'd remember. I may have got personal tax returns but would have been very unlikely to see them, as he 'comandeered' all the post, paperwork etc and as I was working f/t and he was getting basically nothing out of his business I assumed there wasn't really anything for me to fill in.
Have my recent bank statements since I split up from him but he's got all the stuff before that, though luckily I did take my payslips so can prove I was working through it all.
you can get old bank statements from your bank but they're likely to charge you ( afir bit) for them. don't offer if IR don't ask for them. so, for all you know, he might have actually made some money out of it if he 'controlle' all the paperwork. that doesn't amtter now.
if he filled in the tax returns etc, is it possible he put you down as earning some money of which you are not aware?
tell the IR all you know and ask them what they know, then get legal advice. what a situation to be in! good luck tomorrow!
Thanks Branster - I know he made a loss because we got into big debts and he told me when he got a contract, how much it was worth etc so I know very roughly how much income he got from it, just no definite figures. And the problem seems to be that he hasn't filled in ANY tax returns so he probably hasn't put me down for anything iyswim.
I can recommend an excellent fraud lawyer (not saying that you have committed fraud) but is a specialist in things to do with VAT.
don't really know what to say. than thay want a fine for not returning the forms rather than for misleading information.
at least you'll get to know how things stand. let us know and maybe someone here can help.
Thanks jampots - will see what sort of a mess they think I'm in tommorrow then may need that!!!
Branster - they don't know he made a loss though, as they don't seem to have had any forms, they've estimated the tax due as thousands!!!!
WobblyKnix, what a worrying situation for you. I presume you have an accountant who has provided audited accounts for you. They will demonstrate whether you have made a loss, in which case there is no tax to pay - can't pay tax if you haven't made a profit, and if you have made a profit, how much and how much tax is payable. Simple.
Now if you haven't been submitting your tax return, that is something else. They fine the late returns which bumps up costs.
I wouldn't get a tax lawyer involved as they can be very very expensive. An accountant is what you need if you don't already have one, unless you are doing the accounting yourself but accounts must be audited by an outside company. Just be honest with the IR and say you want to sort this out. They will probably be very frosty and indeed horrid but that's the way they are - believe me, I know!!!!! Did your DH employ anybody as he is then liable for their PAYE which is another headache.
If you're definitely sure you signed up for it, it will also be worth officially terminating your role as Company Secretary asap to protect yourself from future liablity - to do this fill in form 288b (second link under the 'forms' heading on the Companies House homepage). Get the company number by looking up the company name using the second drop down box at the top of the home page 'Our products and services' - choose the 'Download free company information' option (available until midnight).
Good luck tomorrow.
Have asked DH and this is what he has dictated for me to type for you:
If it is a limited company, you have nothing to worry about. No profits equals no tax liability and no assets means they can't come back to you. However, if a partnership is involved, you are equally liable joint and severally for all your husband's debts which is serious. I hope there is a limited company involved for your sake. If in any doubt about a limited company, do not go to the Inland Revenue without a solicitor. If a limited company is involved, it doesn't really matter what you do.
Sorry it sounds so depressing. Hope that helps.
WSK - if his business was via a limited company then you can get copies of the accounts (for a price) from Companies House (if you want to send me the name of the company I can look up the details on the business info website subscription website I have access to and email you the relevant accounts). If you have the accounts then at least you will have some kind of handle on the declared profits of the company for the years in question.
In the absense of company tax returns, the Inland Revenue has obviously issued estimated tax assessments and it is up to you or someone to bring the company's affairs up to date and prove that these estimated assessments are excessive.
Thanks again everyone. Chicpea - it was definitely run as a limited company, with him as company director and me a company secretary, officially and I doubt he's filed anything with Companies House if he hasn't even done the tax returns but will look into it. But it was a partnership in the sense that officially it was both of us running it rather than just him.
Will have to get copies of our bank statements, don't even know the account numbers or anything anymore so will have to go and beg at Barclays.
He did get an accountant involved for a tiny bit but I don't think they actually submitted anything, it was only for a couple of months then he feel out with the accountant and decided he could do it himself .
Thanks for all the advice, am going to go to IR today and see what exactly they're expecting from me then try and get all the documents etc.
Thanks for suggesting Companies House, have found the business name and it was apparently dissolved July 2002. Doubt UH would have dissolved it, so would that be because he didn't do the paperwork? Either way, does that make things better or worse?
And no surprise it says that there are no accounts available.
WSK, The IR these days are a LOT nicer than they used to be, they have all sorts of codes of conduct and I'm sure they won't be horrible to you but will be professional. I agree, ltd co = limited liability. So they are probably talking about estimated figures which they came up with in the absence of co accounts. It is also an offence not to file accounts so they may want to talk to you about that too and they will prob point out that if you became co sec then you had certain duties you should have carried out as part of that. The link provided earlier should tell you about that. Good luck for today, I bet you won't find it's as bad as you think, be polite and professional and tell them the truth and I bet you'll be ok. Agree with whoever said get shot of the co sec responsibilities NOW!
It prob makes things better I think, they can see there's not masses of money being made somewhere. What time's your appointment?
Thanks www, am most worried about the offence of not returning the accounts business I think. If the company has been dissolved is there anything for me to do, am I still seen as a company secretary even thought the company's gone?
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