Please can anyone help - financial abuse continuing

[Namechanger2015]

Hi,

I am in a total panic. Ex was financially abusive when married - we were both self-employed and had a limited company account.

He would not give me access to the account, and kept my earnings. Name not on the bank account either.

I left marriage with no access to my earnings etc and set up my own account. Still a director on the old account as I thought I would need this for divorce finance proceedings, else I have no claim to the money he took.

Company accountant is ex's friend and would not respond to my emails. Today I got letter from his accountant saying the account has £32k unpaid tax bill on it from when I left, and its been accruing to be paid in 7 days.

He it expecting me to pay it. When I left it had £40K in the account, which he cleaned out, giving to his friends, paying himself etc, But my name stayed on there.

I don't know what to do. Shaking.

Financial remedy hearing is still ongoing and has cost me so much. Final hearing is in october.

His financial abuse of me is unrelenting. Courts didn't recognise or accept this at the last hearing we had at all.

What is your shareholding of the company. Also, assuming it's a 50pc holding them any payment made out of account must be dividends and your accountant should know that you are due the same amount of any dividends as your husband. Also, is the tax bill a personal tax bill or a company tax bill? This is important as if it is a company tax bill the liability is against the company and not you personally.
Worse case scenario is that the company will go into liquidation.

Someone else with better knowledge than me will answer hopefully as I'm not sure whether your husband can be liable for withdrawing funds from the account that were not dividends. (I.e.they were not after tax).. I would consider hiring an independant accountant to review the transactions that have taken place in the company bank account. If you are a director you have the right of access to the company bank account including statements etc.

I am a director with 50% share. When I left the marriage I left all of my earnings in the account as I couldn't access them.

He then changed accountant without my knowledge or sign-off. I found out and contacted new accountant and told him to send me all paperwork to my new address and all correspondence from then on but he would not reply to my email. I didn't push it as I really lack confidence and avoid confrontation, as a result of my marriage.

He was not withdrawing money as dividends, he was giving it to his friends. He took out a directors loan as well. There was no way I was getting equal money from that account, he was paying me £800/month when I was earning £5000 into the account each month.

The letter is directly against the company and is not a personal loan. If the company goes into liquidation does it then affect my credit rating and stop me getting a mortgage? I assume it would also do the same for him, but he is for some reason relentless with this all.

Finding this all very difficult to cope with, he doesn't ever stop.

I have my own accountant now and he is livid, ex's accountant hasn't provided him with anything despite us asking. My accountant said he is now considering reporting him to the conduct body (can't remember what they are called).

Your new accountant can advise but no, company credit issues will not affect your own credit. If he has taken directors loans then he is a creditor of the company (owes them money), not you. Does your new accountant have access to your company bank account statements?

Thank you so much Kazza,

My accountant does not have access to the account statements to date, but he has warned XH accountant that he will be going to his offices and picking up a copy of everything next week.

I emailed XH accountant in Jan 2016 asking him to send me all paperwork back in Jan 2016 and accountant did not comply and did not reply.

One thing XH did - he overpaid his accountant, paying him £17,000 for services when he had only just employed the accountant 2-3 months before this. I questioned this in court, and XH said it was a mis-payment, he was only supposed to pay accountant £1,700. Accountant produced an invoice for £1,700 to back this up, but never paid back the money into company account. I am sure he did this as a favour to my XH - holding money out of the joint company account and holding it for XH.

Also, company accounts have only ever been signed off by XH, even though his accountant knows I am a director and was not being shown any of the paperwork, as he wasn't sending it to me. XH is also listed as the Person of Significant Control on the accounts, something I wasn't even aware was needed.

So I am really wondering if the accountant is also dodgy and is at fault here? If I need to report him to the authorities I will.

XH is now sending me aggressive text messages about settling the divorce proceedings, and is making it clear he thinks I am liable for this tax bill. Its for £32,000, and it was all accrued after I had left him, the marriage, the house, everything. I had stayed director on the account though.

Ignore your ex and leave it in the hands of your new accountant. Advise your ex husband that you will liaise with your a accountant and take his 'professional' advise only. Also, it sounds like your old accountant should be recognised as a creditor to your company and you should consider taking legal action against him if he does not pay it - again, your accountant should confirm this once he has access to the accounts. Also sounds as though the withdrawals made by your husband should be considered directors loans rather than dividends and so again he may be liable to repay these. Is there any income going into the company now or has it ceased trading?

If you own 50% of the company you should also be listed as a Person of Significant Control - anyone with over 25% of the shares is a PSC.

I think choose your battles. What financial outcome do you want from the court? If there is tax owed and no money in your company why waste your personal money on this? Concentrate on assets like house or whatever.

Thank you. I am 50% director but not listed as PSC - ex has full control of the account. It ceased trading - when I left the marriage in Jan 2015 and I left £40k in there. No income has gone in since and he has spent the £40k.

In terms of picking battles, I just want to not be liable for this debt. Ex signed over £650,000 of rental properties to his dad after I left the marriage. I pursued in court and lost the case and so I already have huge legal bills to pay. I'm trying to sort out this latest issue with just the help of my accountant to back me up and not via costly (crap) solicitors.

Ex has got the pot down to £400k, when he has total assets of approx £1m which I can't access via courts because of his games.

So all I want is half of the £400k (which won't be enough to house me and 3 kids but hey ho).

This latest stunt takes the pot down further to £370k and just leaves me with nothing, so I really want this to stop.

Courts don't seem to recognise this as financial abuse and so I definitely want to cut my losses and end this now.

If you did equal work as your stbx then why not set up on your own and beat him at his own game as it is obviously a lucrative business you're in. As to the tax bill what is your accountants advice on you having to pay it?

As soon as I left the marriage I did exactly that and set up my own limited company and that's doing ok.

My accountant is saying that exH accountant is messing me about and it's clear I am not liable for this.

Ex also set up a company in MY name only, kept for a year and didn't use it, then made is dormant after I left the marriage. All done without my knowledge or consent. Paperwork was all filed and signed electronically, he and his friend (not even directors) signed off the dormant accounts each year.

It feels very big and unmanageable, ex was violent and a bully in our marriage and it's terrifying to fight him on these things.

I think it may be best to cut your losses. It sounds as though a significant chunk of money could be lost to lawyers and forensic accountants. Has your ex suggested any financial settlement yet? As to the dormant company if it's in your ne you shut it down.k

He keeps reducing the settlement pot with deliberate debts like this. He has no intention to pay the outstanding tax at all and will let the company fold, but in the meantime is claiming it as a debt in order to reduce the pot.

I agree it's not worth pursuing via solicitors, but he has done this so often with 10-20k lump sums here and there, all of which become too expensive to be worth unravelling. His family as sitting on over £500k for him, and yet I am struggling to be able to house our children.

Dormant company - he set this up in my name and luckily he also shut this down. But the whole thing was done without my knowledge or consent.

I am looking to settle and cut my losses but he is ruthless with his ongoing bullying, manipulation and games.

I am feeling less panicked now though, so thank you for the advice. Three years of this from him must be ending soon.

Oh and he won't suggest a settlement. He texts me and says we should settle but refuses to make an offer. I come up with a number and then get aggressive messages back telling me I am being unrealistic but never ever makes an actual number back to me.

He seems to make it all very complicated. You need to break it down into bits.

There is a limited company in which you both own shares which seems to owe HMRC £32k and is owed about £16k by its accountant who was over paid. You both should be registered as a PSC (not that it really matters) and you both own half the shares I assume. You remain a director of that company. So your accountant might be able to advise on that side and possibly advise it best to close that company insolvently. I presume neither of you have given personal guarantees to that company's debts.

Secondly there is the divorce.

if that is a company debt which may not have to be paid then I think the pot remains at £400k. As you lost the court action to claim the rental properties unfortunately that will have to be left out.

So you need £400k to house you and the children I suspect. I wonder if the issue over the rental properties even though it went against you might help convince a court you are entitled to 100% of the equity in the house for the sake of the chidlren and perhaps in lieu of any spousal maintenance and perhaps because this chap is unlikely given his form to pay much child maintenance in future either?

I presume you are still living in the family home (and have set up your new company which is doing well).

So what stage is the divorce? Has there been any hearing yet or form Es?

He is making this horrendously complicated, yes.

I have had advice that a company cannot be shut down if insolvent, esp as in this case there is a creditor (his best mate....sigh.....) who owes the company a huge amount of money (over £100k).

We are not personal guarantors, but I've also been advised that if one of us have behaved irresponsibly (by lending huge amounts to best mate, denying me access to accounts...) then HMRC can make the irresponsible party personally liable.

Only ex is listed as PSC, I am not listed. We are both 50% shareholders. All letters go to his address. He lives in the family home, alone.

Me and 3 children live at my parents (in one bedroom!)

We have had hearings and Form E's, final hearing is scheduled for October, so we are doing updated financial disclosures this month.

I want to draw a line and settle out of court, and be finished with this all but he keeps pulling stunts like this and so it feels impossible to negotiate a fair deal out of court.

He is making it very complicated for himself more than anyone else! Do not engage with him directly on company matters, only via your accountant or solicitor. For any directors loans that your husband has, he should have had your agreement for anything over £10k and I believe HMRC may well penalise him for these if corporation tax is outstanding. Re Loan to his friend, is there any reason that you (the company) cannot take steps to recover this amount through legal routes.

Dreadful man. don't worry he will never be happy and karma will make sure he is by far the ultimate loser. We all reap what we sow in life.

Can you do as little as necessary with the company then as it seems an utter side issue and is designed just to worry you and take up your time? I cannot see any legal reason why a debt a limited company owes is set against the £400k equity in the house. It's irrelevant. In the divorce you both own 50% of something that isn't worth anything.

So that leaves the final divorce hearing, the historic legal costs you owe and will have to pay out of your share of the £400k and the fact if it goes to a legal hearing with him having lawyers you might find that goes badly for you without lawyers, but not necessarily.

If he just want to cause you trouble and is using the legal process to be difficult and for psychological reasons which seems likely then it is unlikely to settle out of court. So you will probably have to press on to updating the financials this week and then let the judge decide in October. Does either of you have pensions? If not then the only asset is the £400k house. If you earn less than your ex (you may now, I earned 10x mine) probably for a clean break you might get more than half the £400k, 60%?

Thank you so much for bearing with me and continuing to advise me, this is really helpful. I'll try to answer:

He is making it very complicated for himself more than anyone else! Do not engage with him directly on company matters, only via your accountant or solicitor. For any directors loans that your husband has, he should have had your agreement for anything over £10k and I believe HMRC may well penalise him for these if corporation tax is outstanding. Re Loan to his friend, is there any reason that you (the company) cannot take steps to recover this amount through legal routes.

Company matters - yes I am going via my accountant and to his accountant, my solicitor has been truly terrible and I really have lost faith in her/them. However I am reluctant to change so late in the day. I have been advised to write to ex to remind him as company directors we need to legally pursue costs from his mate, and ask what legal steps he has taken to recover the money. (He will not have done anything - he gave his mate the money for a business investment and will not chase this as it will jeopardise his investment opportunity). I am hoping this alone spurs him onto making me a decent out-of-court settlement.

Dreadful man. don't worry he will never be happy and karma will make sure he is by far the ultimate loser. We all reap what we sow in life.

Yes I do hope this comes back to bite him and his family on the bum, they have been terrible to me and the children.

Can you do as little as necessary with the company then as it seems an utter side issue and is designed just to worry you and take up your time? I cannot see any legal reason why a debt a limited company owes is set against the £400k equity in the house. It's irrelevant. In the divorce you both own 50% of something that isn't worth anything.

Yes I think he is trying his luck by saying the debt is due from both of us, I think he (wrongly) assumes he can make bankrupt the company when it owes tax, and he is presenting this tax bill now just wants to reduce the pot. I am not letting my sols get involved in this bit and am dealing with it myself as much as possible. It is a huge worry for me, but I hope it can't mean too much in court, as its a company matter.

So that leaves the final divorce hearing, the historic legal costs you owe and will have to pay out of your share of the £400k and the fact if it goes to a legal hearing with him having lawyers you might find that goes badly for you without lawyers, but not necessarily.

Bizarrely, he chooses to self-represent, he released his sols at the first hearing and represents himself. His barrister was ferocious though, and I am terrified to go through cross-exam with him again, he twisted everything I said completely.

If he just want to cause you trouble and is using the legal process to be difficult and for psychological reasons which seems likely then it is unlikely to settle out of court. So you will probably have to press on to updating the financials this week and then let the judge decide in October.

He keeps saying he wants to settle out of court and has said so from the beginning of the divorce (2.5 years ago), and pressures me into coming up with a number, He then gets enraged and disagrees with the amount and is horrible via text to me, but will not present a figure himself. I do think he wants to settle out of court, but by pulling the wool over my eyes, not in the interest of a fair or quick resolution.

Does either of you have pensions? If not then the only asset is the £400k house. If you earn less than your ex (you may now, I earned 10x mine) probably for a clean break you might get more than half the £400k, 60%?

I have 10K pensions, he doesn't have any. I do earn less than him, plus I am resident parent with the children full time (he sees them roughly one weekend a month and for half of the school holidays).

Since I left he set up his own company, and has an employee in his new company set-up, who he will be over-paying etc in order to downplay his own income. i.e., his client pays him say £10k. He and employee got £5k each, but now they will be getting £2k/£8k so it looks like ex is earning less. Thats the kind of crap he keeps pulling.

In that case I would have thought you had a very good chance of more than 50% of the equity. In fact unless you live somewhere where you could both buy a new home with share of the equity it may be that you shoudl be in the house with the children until you remarry or cohabit or the youngest is 18 and only then does he get any share of the equity (or else you get say 80% of the equity based on his hiding his real income and fact you are unlikely to get much from him in future for child maintenance or spousal maintenance and it should be a needs based financial order based on what is needed to house the children properly.

In terms of the business you might find this forum useful.

www.ukbusinessforums.co.uk/forums/insolvency.163/

Thank you so much, the forum looks great.

Today I received a text from exh: he suggests we sell the marital house (he lives there), he wants an agents name from me by tomorrow or he will instruct one himself and start the sale of the house.

I said no. My name is on the mortgage so he can't do it anyway, although I feel like I should check that he can't.

He said that I might as well agree, as we have not reached a financial agreement he is going to go to the courts and force the sale.

We have a final hearing booked with the courts for October, so I have really no idea wtf he is playing at now.