In a huge mess with the Inland Revenue, what do I do?

[wobblystarryknicks]

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.

WSK - have only just seen this!

I'm not a tax expert so don't really know what tack the IR will take. However I would have thought that Companies house would have also been levying fines for the late filing of accounts. Please do note though that contrary to what Chickpea says the accounts do not have to be audited as it is highly likely that they fell below the audit threshold. But nevertheless accounts (unaudited) should still have been filed. Usually if there are no accounts filed for a certain period of time Companies house will strike off the company from its register - doesn't sound like it has done so yet. In the short-term you should call companies house and explain the sitution and ask them to send you a directors information ammendment form. This will enable you to resign formally as company secretary. You must fill in the form and send it back to companies house who will register this as part of the company information.

This is important because this will be where the IR got your details from.

Chickpea is right as far as saying that the company is liable for the IR debts not you individually. However if any income at all was taken out of the company while it was in operation then if this income was paid out illegally (in company's act terms) then this money may have to be repaid to the company. But this is highly complex so see what the IR have to say today and then if necessary see an accountant/lawyer afterwards.

I don't think the IR interview will be too difficult and as much as anything it is a chance for you to find out more about the situation.

If any one else is thinking about becoming a director of a company then please please please recognise that this brings with it a lot of serious obligations. Before taking it on do consult one of the numerous guides to directors' responsibilities that you can get from any business orientated bookshop, or at any decent sized library. I think even companies house does a guide too.

Let us know how it goes!

I'd plead ignorance re the accounts I think, tell them you're not with h any more, you had no idea about any of this, complete shock, out of the blue etc. No, sorry, you prob don't need to do anything about being co sec if the co is dissolved, I posted that before you'd established that and posted! The IR site is down but I'll try again in a bit, see if I can find their code of conduct. They are only people, I know they can be scary, I still get a minor eeek! when I see On Her Majesty's Service (or whatever it is now!) on the back of an envelope so I know a bit what you're feeling but I bet it won't be anywhere near as bad as you think.

But I defer to soapbox who clearly knows better than I do re resigning as co sec!

WSK - sorry should also have said that any oncopme taken out of the company by you or exh would probably have attracted tax which will not have been paid (as in a small comany any income taken out is usually treated as dividends) so being able to prove that you didn't take any income out will be important I would assume.

As I've said though - I'm not a tax accountant so please don't treat the advice here as having much weight{grin]

oncopme???? - I'm morphing into a fishlike person

I did of course mean to write income!

Thanks soapbox - you are totally right that starting a company is not something to be taken lightly, and definitely not something to trust your dubious h about.

All the company money went into a company account and I'm not sure whether UH would have taken any out for us but we certainly had to fund the business out of our personal money so on balance I didn't get anything out of it - I was working f/t and it was only that and loans that kept us going, definitely not money from the business. Have also realised that when I left UH and took my payslips, I also took his too so I can prove he was working when he was 'officially' running the company so hopefully that will help prove that we weren't living off money from the company.

Will definitely plead ignorance, as it's 100% true

Please soapbox, one incomprehensible MN'er is quite enough!!!!

WSK - things should be clearer once you have seen them this afternoon. The onus should be on them to clearly scope how they want to take this forward and what they expect from you. It is important that you leave the meeting with achievable action points otherwise things will just drag on in a neverending cycle of unanswered correspondence, Revenue demands etc.

They will want to work out money for the tax return on 31st jan, if they find out he owes them tax, he will have to pay,more than likely it will come str8 out dp's wages, they will check p45's, tax and national isurance records to find out how much they think he owes.

my heart goes out to you, I am also awaiting the conclusion of my dp,s appointment with them this afternoon, he went self employed for about 6months then back to normal employment.
I too thought he was doing all his paperwork-he wasnt, so now he just has a handful of invoices and a few p45's and somehow has to prove to them when he was/wasnt self employed AND earning taxable money....ahhhhhhhhhhhhhhhhhhhhh
(((((((hugs)))))))

by the way, i forgot to say, you MUST go see them before 31st jan, the clarify situation, if he does owe money, they will want it paid, any outstanding money not paid after 31st jan-they will slap a 5%surcharge on every wee/month-not 100%sure, but they will keep charging him they they have all the money back.

busyalexsmummy - sorry to hear you're going through similar - hope it gets sorted soon. The 31st Jan deadline is for personal tax returns though - the IR are after WSK for Corporation Tax due on the limited company, which is based on the company accounting date, specified at incorporation. There's no way they can pursue one individual for another individual's personal liability.

Phew phew phew phew phew PHEW!!!! All sorted and no solicitors or accountants needed!!

Went to see the guy this afternoon and he was fantastic!!! Really really nice, so I'm in total shock!!!!

Basically, they wanted partnership returns and my personal tax returns. They already had info from my employer so that was basically my returns sorted out already. And he really helped with the partnership returns, I only knew very VERY rough figures but he said that was fine, they just needed to fill the forms in to stop it getting any worse and 'to keep the computer happy'!!!!

He didn't even mention the late fees, didn't seem bothered. And as I was definitely sure the business made a loss, even though I don't have exact figures, there should be a teeny tiny rebate coming - if UH had got the returns in properly it would probably have been a lot higher but I'm not bothered, as long as I don't have thousands to pay!!!

And he explained that they'd already 'been after' UH but couldn't get any info out of him, but he said he couldn't tell me any more details, but sounds like I'm high and dry and UH is in for a hard time

Am just gobsmacked it was all so easy and he was so interested in helping me get it all sorted without wanting fees etc etc out of me. I didn't even have to plead ignorance or anything, he seemed happy to help right from the start. Maybe I just radiate hopelessness!!!

Anyway, thankyou everyone for all the advice!!! Have a feeling things would have been a lot different if I lived in a city where they're more on the ball rather than in far off Cornwall but just glad its all over with!!!

Can I buy you all a virtual drink?

Great news WSK - I've been worrying about you all afternoon - silly mare that I am

Aww, thanks soapbox. I was really worried too, thought they'd be taking it a LOT more seriously than he did. To be totally honest, it seems dodgy that he was SO easy going about it but I know I'm not defrauding anyone so I'm not going to complain.

fantastic! really glad it's worked out.

Brilliant! I'm so glad!

Thanks, am over the moon that its all over!!

I've been watching this one as well. So pleased for you . But then I knew tax people weren't scary, even city ones are cuddly

Hurray!!!