I recently came across a client at the end of last year and one of the first things I discovered was that they had a previous limited company from which they used to trade from, due to bad debts, this company was no longer in operation.
This is not particularly uncommon at this time given the world we live in and to be absolutely fair to the client, at the time that this company stopped trading, they did the right thing and went and got what they thought was professional advice.
They were told that if they started a new company then eventually the old company would be struck off at Companies House and they would be free to start again.
I would have to say that I don’t agree with the approach and I am pretty sure HMRC wouldn’t either.
After a period of time, usually after a company has not lodged various statutory documents, the Registrar of Companies will apply to the Court to wind the company up. Such notices are always displayed in the Edinburgh Gazette.
HMRC will monitor the Gazette and will always raise an objection to a company being wound up i.e.they think there may be money due to them.
In this particular scenario HMRC have raised an objection to the striking off and are now chasing the client for Corporation tax returns, VAT returns and payroll returns since the date they stopped trading.
All of this is causing the client unnecessary time and hassle just to prove to HMRC that they are not due anything for the period in question. A fair amount of time has been incurred filling in nil returns to demonstrate to HMRC that there is no loss. Quite correctly they are reluctant to agree to withdraw their objection to the striking off until they are satisfied that all filing requirements are up to date and all payments have been made. An added complication to this is that the company stopped trading over 2 years ago.
This could have all been avoided if the client had been advised to follow the correct procedure. Before you strike a company off you should always approach HMRC first to obtain their approval.
If this had been done the company would have been able to satisfy HMRC that they were due nothing, the client would have then been free to apply to the Registrar of Companies to strike the company off, the notice would have been published in the Gazette, no objections would have been raised and the whole thing could have been finalised within about 5 months of the client deciding to stop trading.
In my experience, whatever the problem, if you deal with it head on rather than hoping it will go away, the pain incurred is considerably less.
Until next time
Simon
Simon can be contacted on 0141 290 0262 or follow him on twitter @simonmurrison
Some interesting websites –
http://www.hmrc.gov.uk/index.htm http://www.business.scotland.gov.uk http://www.newmediabreakfast.co.uk/
I recently came across a client at the end of last year and one of the first things I discovered was that they had a previous limited company from which they used to trade from, due to bad debts, this company was no longer in operation.
This is not particularly uncommon at this time given the world we live in and to be absolutely fair to the client, at the time that this company stopped trading, they did the right thing and went and got what they thought was professional advice.
They were told that if they started a new company then eventually the old company would be struck off at Companies House and they would be free to start again.
I would have to say that I don’t agree with the approach and I am pretty sure HMRC wouldn’t either.
After a period of time, usually after a company has not lodged various statutory documents, the Registrar of Companies will apply to the Court to wind the company up. Such notices are always displayed in the Edinburgh Gazette.
HMRC will monitor the Gazette and will always raise an objection to a company being wound up i.e.they think there may be money due to them.
In this particular scenario HMRC have raised an objection to the striking off and are now chasing the client for Corporation tax returns, VAT returns and payroll returns since the date they stopped trading.
All of this is causing the client unnecessary time and hassle just to prove to HMRC that they are not due anything for the period in question. A fair amount of time has been incurred filling in nil returns to demonstrate to HMRC that there is no loss. Quite correctly they are reluctant to agree to withdraw their objection to the striking off until they are satisfied that all filing requirements are up to date and all payments have been made. An added complication to this is that the company stopped trading over 2 years ago.
This could have all been avoided if the client had been advised to follow the correct procedure. Before you strike a company off you should always approach HMRC first to obtain their approval.
If this had been done the company would have been able to satisfy HMRC that they were due nothing, the client would have then been free to apply to the Registrar of Companies to strike the company off, the notice would have been published in the Gazette, no objections would have been raised and the whole thing could have been finalised within about 5 months of the client deciding to stop trading.
In my experience, whatever the problem, if you deal with it head on rather than hoping it will go away, the pain incurred is considerably less.
Until next time
Simon
Simon can be contacted on 0141 290 0262 or follow him on twitter @simonmurrison
Some interesting websites –
http://www.hmrc.gov.uk/index.htm http://www.shirlawscoaching.com/
http://www.business.scotland.gov.uk http://www.newmediabreakfast.co.uk/