To be fuming with DP re his business

[Wham83]

DP has a small business, been trading for over a decade. Not a huge turnover, just ticks over. It’s a very small operation, just him but I am listed as a minority share company director on paper only, I don’t have anything to do with the business, don’t take any money out etc, but obviously have to file tax returns via the accountant as I am listed as a director.

DP has a history for as long as he’s been trading of paying tax late and constantly being charged late payment fees by HMRC. It’s been a constant argument between us. He does have the money within the business accounts, he just doesn’t see it as a priority so doesn’t pay and it goes to debt collection…constantly. Well, this morning I’ve received a call on my mobile from a debt collection agency looking to recoup the money owed to HMRC. I have never had any personal debt that’s required debt collection and never received a call like this relating to his company. I felt so embarrassed and humiliated to receive the call. I do not understand why he doesn’t just pay the money on time - it’s there in the business account! I don’t have access to the business account as I am not involved with it, so I can’t pay it for him. It’s tiring to have the same rows and conversations about it every time tax or vat is owed.

AIBU to be fuming regarding the lack of care and for receiving the call?

That’s shit. My DH is also a small business owner and I’m a director and maybe this has happened once in 15 years as an oversight. It’s not acceptable - would resigning affect your income if you take dividends?

I partially agree with this, and HMRC will implement payment plans, but technically, the money should be available to pay immediately. I know it's a little more complicated than that. But if, as the OP says, the business is ticking over and turning over less than 1.6 million. I'd be using a Cash Accounting Scheme. although I think if you've commited VAT offences in the past 12 months you can't join or get kicked off.

OP - speak to your accontant, espically if you're not sure or this is not your day to day dealings.

Crikey, what an awful situation for you to be in @Wham83

As others have suggested, resign from your position as director - and at least you will be able to draw a line under that moving forward.

My DH has been self employed for many, many years, and always pays every bill on time. He has always said, you don't pi$$ about with HMRC or the bank.

If the money is there, I really don't understand why your DH doesn't pay his bills on time. 🤷‍♀️

Yes you should have the funds but we all know especially at the moment that's not easy for some small businesses. Im not talking about booking your holiday or paying school fees. Im talking genuine hardship where a personal bill or expense is important, i wasn't answering in response to op, I was answering in response to the post i quoted.

With respect, it does sound like you’ve been somewhat naive in all of this. I have never heard of it being easier to have two directors than only one, especially given you have absolutely no input in the business. I also find it strange you say you’re a minor shareholder but don’t receive any money from the company. That’s very unusual and normally you’d be paid dividends in line with your share %. I think there could be a lot that you’re not being told about the situation here.

I voted you are unreasonable because instead of resigning as director you still have not done so. And you didn’t do so in the 10 years this has caused you problems. In the time you’ve done this thread and in the yearly arguments you’ve endured, you could have sorted it out in minutes.

Are you a shareholder? You really need to know. You said DP rather than DH, so if you are a shareholder and company director it's not even as his wife. If he is taking dividends, he needs to pay other shareholders proportionately the same dividend per share. Has he been doing this but not transferring the cash??

If you are listed as Company Secretary then it is specifically your role to ensure that statutory filings and so on are made. Look up your duties so you know what you have been responsible for.

Dividends are paid in a 70% 30% split but taken out the account in one payment, it’s around £1100 per month total dividends (for both of us, not individual). Like I said, the business doesn’t turn over mega bucks. It gets paid into a joint account rather than individual accounts.

I have filled out the form and submitted to companies house with a copy e-mailed to the accountant

If you’re a director then you’re responsible. Resign as a director or take on some of the management.

There isn’t necessarily a minor and a major director. One director might be deemed a person with significant control if they are the one with day to day control, but both directors are bound by the Companies Act 2006 and the duties contained within that. It’s also not more difficult to have a company incorporated with only one director, just usually requires a tweak to the model articles with regards to what constitutes a quorum.

You can file a TM01 form online or in the post and resign as a director, although you’ll still be on the hook for anything that happened during your time as a director.

I would remove yourself tbh, as your husband hasn’t been honest in many, many things he’s told you and best to abandon ship now!

So you do SE then ? Or your Accountant does?
Its not usual to do things this way to avoid Tax, its legal as long as you actually DO that 30% of work in The Business (I doubt you do)
Your H's personal tax bill will go up now so make sure he has enough for that at the end of January

Agree. We occasionally make strategic moves to delay VAT/tax payments if cash flow is tight. However, we accept the fines and the interest due and contact HMRC to explain. They definitely do not take priority over everything else.

'i know the money is definitely there in the bank account.' How do you know what money is there if you don't have access to it?

'he just can’t be bothered paying it until it goes to debt collection and he gets harassed and I fall out with him.' There is more to this not being bothered, he has cash flow problems you don't know about. No business owner in their right mind fucks around with the tax man!

My DH owns a business and dealt with a customer who operated like this, constantly paying late or coming up with excuses like his customer hasn't paid him so he couldn't pay my DH. Effectively, robbing Peter to pay Paul. It later transpired this man had a gambling problem and debt up to the eyeballs. He then declared bankruptcy and starting up a new 'business' under a different company name listing his girlfriend as the director.

I know the money is there as I see the business bank statements which are delivered to our address, they are never hidden and he has no issues with me looking.

He doesn’t have any business outgoings, only tax and vat. No overheads so the only people he owes money to is HMRC, not other companies. He definitely doesn’t have a gambling problem or cash flow problem, it is pure laziness and his dislike of paying money to HMRC - which makes it all the more frustrating and tiresome

How strange.

You haven't just been naive. You haved failed in your statutory duties as a director set out in the Companies Act. It's your name and your duty. Resign.

And your husband sounds as bent as a nine bob note in the way he's operating the company.

£1100/month?! Is that all he contributes to the household - it’s not even worth the stress OP, he needs to fold the business and get a salaried job so the payroll dept pay his tax for him…

What kind of business doesn’t have any outgoings?

It's perfectly legal for her not to do any work and receive a dividend on the profits. Most small businesses are set up to be tax-efficient in this very way.

I'd say the only concern is if her husband is taking zero salary and only dividends, but even this is a grey area.

I voted YANBU because I don't think she is BU to be pissed off at her husband.
However she is definitely BU regarding her lack of understanding and appreciation of what responsibilities she's signed up for as a director.

Where does she say this? I read this as an addition to whatever his normal job is.

She can do this as a shareholder though, no need to be a director as well.

It 100% will have been set up this way to maximise tax allowances on dividends imo. Nothing wrong with that per se, as long as the company is making a profit!

He’s a contractor, so works for other companies as a contractor, who then pay his business and he takes a salary via the his business as well as dividends. Meaning there are no overheads, just tax, vat and accounting fees