Restaurant liquidation avoid HMRC
Discussion
https://www.manchestereveningnews.co.uk/news/great...
Looking at companies house, people etc- how can this happen?
Looking at companies house, people etc- how can this happen?
Edited by Hugo Stiglitz on Monday 6th May 08:33
Puzzles said:
There’s a restaurant owner near me who’s had 12 restaurants over the last 15 years, every single time they go bust owing the taxpayer a big sum, the last one over £300k!
So he's either an incredibly bad businessman who doesn't learn from his mistakes, 12 times - or a fraudster.This is the part of 'limited' company thing I don't agree with and I don't understand why it's allowed to continue, decade after decade, as a tax loophole for fraudsters.
The locals say it’s because he uses good quality ingredients and doesn’t charge the earth…
I’m amazed anyone supplies him, must be cash in collection..
He does mix it up with his wife as the owner/director sometimes but you know where the control is.
Also uses slightly different names, DoBs etc to make tracing it on companies house harder.
I’m amazed anyone supplies him, must be cash in collection..
He does mix it up with his wife as the owner/director sometimes but you know where the control is.
Also uses slightly different names, DoBs etc to make tracing it on companies house harder.
Edited by Puzzles on Monday 6th May 16:56
Puzzles said:
The locals say he it’s because he uses good qualify ingredients and doesn’t charge the earth…
I’m amazed anyone supplies him, must be cash in collection..
He does mix it up with his wife as the owner/director sometimes but you know where the control is.
Also uses slightly different names, DoBs etc to make tracing it on companies house harder.
Companies House doesn't need any help making things opaque. If you were to search me on CH you'd only find a couple of the firms I am associated with. My name and DOB are correctly stated every time.I’m amazed anyone supplies him, must be cash in collection..
He does mix it up with his wife as the owner/director sometimes but you know where the control is.
Also uses slightly different names, DoBs etc to make tracing it on companies house harder.
Hugo Stiglitz said:
Eric Mc said:
How can what happen?
Liquidation, 400k HMRC voided? Company keeps trading That is where the company DOES NOT keep trading but a new company is created by the same people to more or less carry on the same business?
If HMRC is listing these businesses as "tax evaders", then they must have been foundf guilty of the crime of tax evasion. Otherwise they wouldn't be listed. If they have been formally found guilty, then they can't have got away with it, can they?
And if HMRC listed companies or people who had not illegally avoided paying tax then they could be sued for defamation.
- The whole point of "limited company" status is to encourage people to set up businesses without the risk of losing all their personal assets if the business fails. The company is a self-contained, independent thing.
- Once a company runs out of money, which typically means can't pay its staff, suppliers, taxes etc on time, it's insolvent and the directors should stop trading. i.e. close the business.
- If the directors don't stop trading they lose the protection of "limited" status and become personally liable for debts of the company.
A company trades for 3 months, charging its customers 20% VAT and hangs onto that 20% in its own pocket.
In the following 3 months the company has to pay over that VAT money to HMRC.
The directors know the future VAT payment to HMRC is coming so if they've got any sense they take care to protect that cash, making sure they're ready to pay it to HMRC.
Nonetheless it's very tempting for directors to dip into the VAT cash and use it in the business - to help "cash flow".
When a company goes bust it often turns out the directors have spent the VAT cash they knew would be payable to HMRC. "We thought the company just had a short term cash flow problem but it turned out to be a lot worse and the company went bust".
After the company goes bust there will be tax debt outstanding to HMRC and it becomes a question of whether,
a) The directors acted sensibly and HMRC is just another person who's lost money in the failed business, or
b) The directors went on trading after the writing was on the wall, in which case they will be personally liable for that unpaid VAT.
In summary, it's not unusual for companies to go bust and for the debts, including tax, to be left wholly or partly unpaid.
These days, insofar as any money does remain in the company, HMRC gets paid out ahead of e.g. suppliers.
Business go out of businesses for all sorts of reasons. Mostly it is down to bad luck or changes in the economic climate. Occasionally it is down to poor decision making by the management/owners. And sometimes it is down to downright fraud.
Tax evasion (not tax avoidance) is technically, fraud - so the companies that HMRC has listed MUST have traded in a fraudulent manner for HMRC to have named them publicly.
If they have committed fraud, then the directors will be liable.
Tax evasion (not tax avoidance) is technically, fraud - so the companies that HMRC has listed MUST have traded in a fraudulent manner for HMRC to have named them publicly.
If they have committed fraud, then the directors will be liable.
Panamax said:
* The whole point of "limited company" status is to encourage people to set up businesses without the risk of losing all their personal assets if the business fails. The company is a self-contained, independent thing.
A company trades for 3 months, charging its customers 20% VAT and hangs onto that 20% in its own pocket.
In the following 3 months the company has to pay over that VAT money to HMRC.
The directors know the future VAT payment to HMRC is coming so if they've got any sense they take care to protect that cash, making sure they're ready to pay it to HMRC.
Nonetheless it's very tempting for directors to dip into the VAT cash and use it in the business - to help "cash flow".
When a company goes bust it often turns out the directors have spent the VAT cash they knew would be payable to HMRC. "We thought the company just had a short term cash flow problem but it turned out to be a lot worse and the company went bust".
After the company goes bust there will be tax debt outstanding to HMRC and it becomes a question of whether,
a) The directors acted sensibly and HMRC is just another person who's lost money in the failed business, or
b) The directors went on trading after the writing was on the wall, in which case they will be personally liable for that unpaid VAT.
In summary, it's not unusual for companies to go bust and for the debts, including tax, to be left wholly or partly unpaid.
These days, insofar as any money does remain in the company, HMRC gets paid out ahead of e.g. suppliers.
Do we have any stats on how often b) actually happens? AFAIK HMRC are utterly strapped for manpower so unless you are ripping off BIG time or are in the public eye then chances of getting done must be very low?- Once a company runs out of money, which typically means can't pay its staff, suppliers, taxes etc on time, it's insolvent and the directors should stop trading. i.e. close the business.
- If the directors don't stop trading they lose the protection of "limited" status and become personally liable for debts of the company.
A company trades for 3 months, charging its customers 20% VAT and hangs onto that 20% in its own pocket.
In the following 3 months the company has to pay over that VAT money to HMRC.
The directors know the future VAT payment to HMRC is coming so if they've got any sense they take care to protect that cash, making sure they're ready to pay it to HMRC.
Nonetheless it's very tempting for directors to dip into the VAT cash and use it in the business - to help "cash flow".
When a company goes bust it often turns out the directors have spent the VAT cash they knew would be payable to HMRC. "We thought the company just had a short term cash flow problem but it turned out to be a lot worse and the company went bust".
After the company goes bust there will be tax debt outstanding to HMRC and it becomes a question of whether,
a) The directors acted sensibly and HMRC is just another person who's lost money in the failed business, or
b) The directors went on trading after the writing was on the wall, in which case they will be personally liable for that unpaid VAT.
In summary, it's not unusual for companies to go bust and for the debts, including tax, to be left wholly or partly unpaid.
These days, insofar as any money does remain in the company, HMRC gets paid out ahead of e.g. suppliers.
eg
Gary Bricky Ltd
Garys Brick Services Ltd
Gary HomeCare Services Ltd
Gary & Co Bricky Ltd.
Must be hundreds a month?
I haven’t researched the firms mentioned in the article. But were they really “bang at it” or legitimate business closures in some cases?
I have lost several companies over the years, despite my best efforts, and in all cases HMRC were owed money. I would have been royally pissed off if HMRC had painted me as a tax-dodging rogue. I
I have lost several companies over the years, despite my best efforts, and in all cases HMRC were owed money. I would have been royally pissed off if HMRC had painted me as a tax-dodging rogue. I
I was using Google Street View earlier to see if I could find a restaurant in Birmingham that we're planning to go to (SOI 1268). It doesn't appear in street view, presumably because it's relatively new and the picture is from April 2022. Where it gets interesting however, is if you click on "see more dates" and look at the same building over time - a number of different Indian restaurants (maybe 6 or 8) over the past 12 or so years, all with very different signage, so not a minor tweak. The latest occupant also seems to have had an unfortunate fire - presumably an accident.
Louis Balfour said:
I haven’t researched the firms mentioned in the article. But were they really “bang at it” or legitimate business closures in some cases?
I have lost several companies over the years, despite my best efforts, and in all cases HMRC were owed money. I would have been royally pissed off if HMRC had painted me as a tax-dodging rogue. I
You can read the legislation that underpins that list, you have to be bang at it to get yourself on there.I have lost several companies over the years, despite my best efforts, and in all cases HMRC were owed money. I would have been royally pissed off if HMRC had painted me as a tax-dodging rogue. I
NorthDave said:
I live round the corner from there and it is still trading and any issues were not opaque - it stayed open all the time.
I can't believe that venue generated those figures though. Its popular but now way will it generate enough for that tax bill!
I agree, it's not a bad place, not my sort of place but my wife likes it. Just the usual fare but I'm surprised that they tax bill was soo high. I can't believe that venue generated those figures though. Its popular but now way will it generate enough for that tax bill!
GiantEnemyCrab said:
Do we have any stats on how often b) actually happens?
Must be hundreds a month?
I don't have the stat's at my fingertips but can assure you a truly scary number of new businesses fail in their first year. The heart-breaking thing about it is every time it's somebody's dreams going down the toilet. The business world looks easy to a bystander but it's a harsh environment in which to live/exist. And so many businesses end up as "subsistence" rather then "profit".Must be hundreds a month?
I was interested to read Eric's comment about "luck", and I guess he's seen a lot of this stuff. For my own part I still think the old saying "look before you leap" covers a lot of ground.
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