Absolute mess over setting up a ltd company

[Realitea]

She set up a ltd company four years ago. Companies house never notified hmrc. He tried to file the tax returns but it wouldn’t let him. He personally does his as self employed but not the company’s. He doesn’t make enough money to pay tax. He also thought he didn’t meet the threshold for corporation tax but we’ve just found that everyone has to pay that.
He’s now got people helping him but I’m thinking this is seriously bad news and wondering what kind of penalties he’s going to have to face here.
Anyone know?

Sorry, ‘she’ should be DH!

I hope he's gone to a good local accountant to help him not just some 'people'?

The fines for non filing for 4 years will be several thousand.. has the company not been dissolved already?

Search it on companies house and look at its status. Companies that do not file accounts and confirmation statements are usually dissolved quite quickly after the deadline is missed.

I can only suggest you find a very good accountant Asap that works in this field , it's his/ her job to advise and know the law , he / she will be the best position to advise you

Luckily he has just met with an accountant who is helping but she’s also very concerned. The business doesn’t even have thousands in it. Probably about 3k. He has always done the companies house filing but not The accountant noticed today that the assets didn’t add up for each year aswell. It’s a total mess

Always done companies house ‘But not hmrc’ that should say. I really should read through what I type first!

Is the accountant properly qualified and experienced dealing with things like that? Your OH really doesn't want to waste time and spend money on an accountant who hasn't a clue about how to resolve this.

Don't forget that the word "accountant" isn't protected in the same way as doctors, solicitors, architects, etc., so literally anyone can call themselves an accountant and practice accountancy on the unsuspecting general public.

As you've found, limited companies aren't for the ill-informed. He needs proper advice as to the costs (inc accountancy) of bringing things up to date, paying the fines, paying the taxes etc., as opposed to letting Co House strike it off and your OH starting a new company with proper advice this time around.

I went to the initial meeting with the accountant and she seemed excellent and she’s very ‘on the ball’ - lots of emails and she is acting as his agent now which is a relief. She was horrified when it all became clear how ill informed dh hs been so far. He also has a business coach now but that may aswell be put on hold while this mess it sorted out. I am thinking the business will have to be dissolved as there isn’t even enough in the business to pay the fines

So he had filed accounts and confirmation statements with companies house just hadn't filed the CT600's with HMRC? I'm very surprised HMRC had never come after him. He'll probably get fined and will have to pay interest on any outstanding amounts.

That’s right, companies house are suppose to notify hmrc but they never did. We’ve never had anything from them. He does his self assessment as self employed separately but for the ltd company he has never had anything.
I don’t think this will be enough reason for them not to fine him though and I expect it’ll be thousands plus interest. I wonder if there’s a way to find out. Plus the penalties for not paying corporation tax

There will only be CT payable if the company had profits - what net profit was there each year?

Probably only about a thousand pounds if anything

How did OH pay himself? Presumably he took dividends or a wage? Did he do the right submissions to HMRC re wages? When you say a thousand pounds profit, was that before or after his dividends?

If he used a company formation agent that may explain why he didn't receive anything from HMRC. They'll have sent the initial letter with tax reference and subsequent letters asking for tax returns to the registered office - which at first may have been the formation agent's address. I've never known HMRC not to pick up on a new company formation - they have an automatic data feed between them. I think it's far more likely that the correspondence from HMRC has gone adrift rather than them not sending it. Alternatively, did your OH tell them at first that he wasn't trading? They usually put a "hold" on dormant companies and rely on the owner telling them when it starts trading to trigger tax return demands etc.

Regardless of that, HMRC will want all taxes due, and are very unlikely to waive the late filing penalties. If their systems show correspondence was sent to the registered office, then they'll definitely not waive anything!

It is your DH's responsibility as a director to make sure the company fulfils its statutory obligations, not Companies House.

HMRC will want all the money. Your DH will need to fill out the company returns retrospectively, or they will make assessments. They may apply penalties as well as interest. If the company cannot pay it will need to be liquidated - HMRC might petition for it to be wound up.

If the company is liquidated, Your DH could be disqualified from acting as a director.

Thank you for all the information. I had a feeling that might happen.
He has only just made the accountant his agent and I am surprised she hasn’t run away from this disaster when she got the full picture!
He paid himself a wage, not even £100 a week. It’s been a lot of work for nothing this whole time really.