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?

You have duties as a director that it doesn’t sound like you are fulfilling?

And you actually trust him?

You should talk to your accountant before resigning as doing so may have further tax implications for you and as it sounds like you have no idea about any of it seeking expert advice is the sensible thing to do.

Going against the tide, I feel that in your position I would insist on access to the business bank account and then would pay the tax bills myself. I know that you shouldn't have to, but it is better than getting late payment fines. You would save a fortune if the bills were paid on time.

Not all Accountants do, they tend to be either Compliance or Advisory, the latter is more common now. Our Accountant just did the Compliance bit for many years until I decided to switch and our new one is Advisory. She now maakes suggestions, helps us actually plan and saves us a lot of money, many Accountants will just do what you ask them to and no more

Accountant here...you can lead a horse to water, but you can't make it drink. You can tell a client what expenses can be claimed, but if they don't provide the information it can't be claimed. Mileage is a common one that people miss out on, because they can't be a*d recording it properly, even with all the apps etc that are available these days. A good accountant doesn't just make up or estimate expenses, because you need to provide documents to support them in the event of an audit. It doesn't sound like the OP's partner is the best at record keeping, so it's very likely he just doesn't bother with mileage because it's a bit of a pain to record it properly.

He could be putting a lot more through the company! Software costs, phones, travel, mileage etc he’s missing a trick having NO expenses

raises so many questions
I know. One minute OP is ditsy, has no idea what being a director entails and doesn't "have anything to do with the business". The next she can quote chapter and verse on her DH's IR35 status and expense claims ...

Exactly - all very odd.

True - I have an app that records my mileage for me, saves me a fortune at tax time even if it’s a faff to remember every day 😂

Does this not affect your personal credit scores and put your mortgage at risk? Obv he does pay it in the end but personal assets can be seized can’t they as part of a business tax liability?

OP, there is no such thing as a 'minor' and 'major' director as far as companies law is concerned, and there's no such thing as being a director 'on paper'. You are listed as a director on Companies House, which means that you and your husband are jointly and severally liable for any responsibilities relating to the company. In order words you are both share the responsibility for any liabilities and you can also each be held individually responsible for any debts. Unless you are willing to take those responsibilities seriously you need to get in touch with Companies House to remove yourself as a director. You are still liable for any debts accrued whilst you were a director so make sure your husband pays up asap. Read him the riot act too, because this type of behaviour could well lead to you losing your home.

I must say OP this certainly sounds very shady, but what could his motive be? I don't want to jump to assumptions but have you considered the possibility he is saving on the side for a new life and leaving you?

Oh he’s claiming them
I think the op trying to change our view of him
but he’s sketchy
and HMRC are now on to him properly
I imagine next time it’ll be an investigation in to his accounts because this chap will not have been reporting correctly given the op freely admits he dislikes paying anything to HMRC!

Sadly? The OP is well and truly enmeshed in any of the consequences until she extracts herself
but
once she extracts herself, she’ll have no idea of what sketchiness her husband is doing re accounts

Odd isn’t it

Sounds like maybe the couple is made for each other

OP - I haven’t RTFT so this may have been covered. You need to look into the difference between a Shareholder and a director. They are not the same thing!

Even so - as a director you are not liable for company debts (assuming the company is Limited).

however, even by resigning as a director, you are still jointly liable for your husband’s debts in that they can be set against marital assets.

If you are as concerned about his ability to deal with the company’s finances as you seem, you need to increase your knowledge base on the above to know where you stand.

No - assuming the company is a limited liability company, ie called XX Limited.

Debts do not transfer to directors or shareholders unless a Personal guarantee has been given.

These are company debts

OP has no personal liability to pay
debts owed by the Limited company

He could set up a direct debit to pay VAT, easy peasy

I've paid corporation tax, employers PAYE liability and VAT in the past couple of months. None have involved logging on to HMRC. I just pay direct from the business bank account.

Ahh thanks for clarifying this. It was something I was worrying about for OP

You can also download the HMRC app and it tells you exactly what needs to be paid and when.

Or there has been mismanagement

The debt doesn’t transfer in the case of mismanagement.

If a legal claim is brought against the directors for antecedent transactions (a lot more than mismanagement) then one outcome can be that the court directs them to make recompense to the company (or its creditors) for the loss caused. But the OP is a long long way from that situation.

I know but lots of people were saying that OP and her H cannot be held responsible for debt in a LTD company and it is not that simple. In some circumstances they can