Voluntary insolvancy
Discussion
Had a LTD company for 4 years and have been knocked a few times in that time.
That and piss poor organisation on my part (just being honest!) have caused cash flow issues.
I owe £15k, well the LTD company does. £2k to a supplier, £1k LTD company credit card and the rest to HMRC. Plus a grand over two bloody parking fines!
I do also have about £4k with Snap-On but I've told him about this and he said worse comes to worse we'll move it to personal name (got no qualms paying this and it's mainly diagnostic equipment I lease/finance and I'm not loosing them!)
I DO NOT need the company anymore and have been advised to go self employed for a year to gain a mortgage (different story!).
Anyway, I've spoken to 2 insolvancy companies today and they both effectively said, start a new LTD company, sell assets from LTD company 1 to LTD company 2. (there aren't many assets anyway)
Pay them £5k and start the process, stop trading under LTD comapny 1 straght away, trade with company 2 or just self employed.
Walk away from it.
I've asked one about paying the supplier as I simply don't want to knock them. Their HO has sent it to a DCA anyway and I refuse to pay those horrendous companies so I've already told the branch about potential insolvency and said get the debt back off that DCA and I will pay it personally, which I will.
It just seems to easy. They've both said £10K is nothing to HMRC so they won't care too much.
I don't want a company in the sense the paperwork is so much easier self employed, what you earn minus what you spend. Job jobbed.
That said new sister in law is an accountant so may just pay her to do the books once a month.
Anyone got any experience in all this?
That and piss poor organisation on my part (just being honest!) have caused cash flow issues.
I owe £15k, well the LTD company does. £2k to a supplier, £1k LTD company credit card and the rest to HMRC. Plus a grand over two bloody parking fines!
I do also have about £4k with Snap-On but I've told him about this and he said worse comes to worse we'll move it to personal name (got no qualms paying this and it's mainly diagnostic equipment I lease/finance and I'm not loosing them!)
I DO NOT need the company anymore and have been advised to go self employed for a year to gain a mortgage (different story!).
Anyway, I've spoken to 2 insolvancy companies today and they both effectively said, start a new LTD company, sell assets from LTD company 1 to LTD company 2. (there aren't many assets anyway)
Pay them £5k and start the process, stop trading under LTD comapny 1 straght away, trade with company 2 or just self employed.
Walk away from it.
I've asked one about paying the supplier as I simply don't want to knock them. Their HO has sent it to a DCA anyway and I refuse to pay those horrendous companies so I've already told the branch about potential insolvency and said get the debt back off that DCA and I will pay it personally, which I will.
It just seems to easy. They've both said £10K is nothing to HMRC so they won't care too much.
I don't want a company in the sense the paperwork is so much easier self employed, what you earn minus what you spend. Job jobbed.
That said new sister in law is an accountant so may just pay her to do the books once a month.
Anyone got any experience in all this?
I’ll caveat this by saying it’s been a few years since I played in this particular playground.
But I’m surprised that an IP is advising you to do this. They’re right in that HMRC won’t do anything but that’s because an insolvent company isn’t worth suing. What they should be telling you is that as director of an insolvent company your duty is to have regard to the interests of unsecured creditors and to treat them even handedly. Leaving HMRC whistling for >> than the other creditors combined, and/or paying off the creditors you need on the qt after the event smacks of not treating them even handedly.
The liquidator of the company has to fill out a D report which goes to a boring dept in the Govt that specialises in disqualifying people from acting as directors. Not treating creditors even handedly once you’re insolvent, trading with the crown’s money (which is how the Co ends up owing it >> anyone else) and selling the assets to yourself - I will guess in a hurry and without a formal valuation to back up the sale price - are all enough for me to have potted a ton of directors back in the day.
You might get done for 2 or 3 years (relatively light) and you might get permission to act as a director even though you’re disqualified. Of if you’re going to be SE’d for the next five years (it usually takes two years to start disqualification proceedings) and don’t mind a bill for legal fees it might not matter at all that you’re disqualified.
But I would have thought an IP would have been through all this with you.
But I’m surprised that an IP is advising you to do this. They’re right in that HMRC won’t do anything but that’s because an insolvent company isn’t worth suing. What they should be telling you is that as director of an insolvent company your duty is to have regard to the interests of unsecured creditors and to treat them even handedly. Leaving HMRC whistling for >> than the other creditors combined, and/or paying off the creditors you need on the qt after the event smacks of not treating them even handedly.
The liquidator of the company has to fill out a D report which goes to a boring dept in the Govt that specialises in disqualifying people from acting as directors. Not treating creditors even handedly once you’re insolvent, trading with the crown’s money (which is how the Co ends up owing it >> anyone else) and selling the assets to yourself - I will guess in a hurry and without a formal valuation to back up the sale price - are all enough for me to have potted a ton of directors back in the day.
You might get done for 2 or 3 years (relatively light) and you might get permission to act as a director even though you’re disqualified. Of if you’re going to be SE’d for the next five years (it usually takes two years to start disqualification proceedings) and don’t mind a bill for legal fees it might not matter at all that you’re disqualified.
But I would have thought an IP would have been through all this with you.
Greg66 said:
I’ll caveat this by saying it’s been a few years since I played in this particular playground.
But I’m surprised that an IP is advising you to do this. They’re right in that HMRC won’t do anything but that’s because an insolvent company isn’t worth suing. What they should be telling you is that as director of an insolvent company your duty is to have regard to the interests of unsecured creditors and to treat them even handedly. Leaving HMRC whistling for >> than the other creditors combined, and/or paying off the creditors you need on the qt after the event smacks of not treating them even handedly.
The liquidator of the company has to fill out a D report which goes to a boring dept in the Govt that specialises in disqualifying people from acting as directors. Not treating creditors even handedly once you’re insolvent, trading with the crown’s money (which is how the Co ends up owing it >> anyone else) and selling the assets to yourself - I will guess in a hurry and without a formal valuation to back up the sale price - are all enough for me to have potted a ton of directors back in the day.
You might get done for 2 or 3 years (relatively light) and you might get permission to act as a director even though you’re disqualified. Of if you’re going to be SE’d for the next five years (it usually takes two years to start disqualification proceedings) and don’t mind a bill for legal fees it might not matter at all that you’re disqualified.
But I would have thought an IP would have been through all this with you.
Fair enough thank you for your reply.But I’m surprised that an IP is advising you to do this. They’re right in that HMRC won’t do anything but that’s because an insolvent company isn’t worth suing. What they should be telling you is that as director of an insolvent company your duty is to have regard to the interests of unsecured creditors and to treat them even handedly. Leaving HMRC whistling for >> than the other creditors combined, and/or paying off the creditors you need on the qt after the event smacks of not treating them even handedly.
The liquidator of the company has to fill out a D report which goes to a boring dept in the Govt that specialises in disqualifying people from acting as directors. Not treating creditors even handedly once you’re insolvent, trading with the crown’s money (which is how the Co ends up owing it >> anyone else) and selling the assets to yourself - I will guess in a hurry and without a formal valuation to back up the sale price - are all enough for me to have potted a ton of directors back in the day.
You might get done for 2 or 3 years (relatively light) and you might get permission to act as a director even though you’re disqualified. Of if you’re going to be SE’d for the next five years (it usually takes two years to start disqualification proceedings) and don’t mind a bill for legal fees it might not matter at all that you’re disqualified.
But I would have thought an IP would have been through all this with you.
Is that aimed at me saying I'l pay the suppliers personally?
Have a look here;
https://www.ukbusinessforums.co.uk/threads/closing...
At the levels your talking about I wouldn't bother with an IP and would look at the above route. IF however you do choose to use an IP then you need to be aware of certain matters from your accounts, for example do you have an overdrawn loan account (which they will want back), have you been paid dividends within the current financial year for which you probably won't have formal accounts for (which they will want back).
From my limited experience of such matters through business I have found IP's to be only there to line their own pockets and generally have little or no interest in returning monies to creditors.
https://www.ukbusinessforums.co.uk/threads/closing...
At the levels your talking about I wouldn't bother with an IP and would look at the above route. IF however you do choose to use an IP then you need to be aware of certain matters from your accounts, for example do you have an overdrawn loan account (which they will want back), have you been paid dividends within the current financial year for which you probably won't have formal accounts for (which they will want back).
From my limited experience of such matters through business I have found IP's to be only there to line their own pockets and generally have little or no interest in returning monies to creditors.
So you pay 5k to the IP and 4k to the supplier, total of 9k plus buying the assets. In return you potentially save 6k, creditors not paid.
Not worth it, keep the company going and sort the 15k out.
You probably have credit accounts currently and a track record, which you may lose. It is hassle changing it all for a relatively small saving.
Not worth it, keep the company going and sort the 15k out.
You probably have credit accounts currently and a track record, which you may lose. It is hassle changing it all for a relatively small saving.
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