How are DL's and outstanding tax dealt with in liquidation?

[foliedouce]

Just reading that Ant MIddleton's (Celebrity SAS host) business has gone into liquidation owing £1.2m to HMRC and has a £2.7m Director's Loan outstanding.

https://metro.co.uk/2023/01/16/ant-middleton-owes-...

Clearly he’s ripped a lot of cash out of the business!!

From memory, Dominic Chappell went to prison doing a similar thing with BHS (took money out of BHS, paid into his Ltd company, ripped the cash out of that, not paying tax then went into liquidation).

How would this now be dealt with? Does Ant run the risk of going to prison (again!)?

Assuming they will go after Ant's assets to try and recover the £2.7m? If it can’t be paid back, does it then incur a tax charge as remuneration?

Does HMRC have any recourse on the directors or is that ring fenced within the Ltd company?

Idle curiosity really on what the consequences are to Directors on such a badly managed business.

[Simpo Two]

Clearly a man from the Revenue should go round and sort him out...

[Countdown]

The liquidators will be chasing the Company's debtors to recover any money they owe. They could take him to Court and potentially make him bankrupt if he doesn't pay.

[foliedouce]

Countdown said:

The liquidators will be chasing the Company's debtors to recover any money they owe. They could take him to Court and potentially make him bankrupt if he doesn't pay.

So he'll get away with not paying HMRC then and just have to pay the DL?

I'd be interested to know if the DL will be treated as income (and taxed) if he can't pay it back.

[Eric Mc]

If he can't pay the director's loan back to the company because he doesn't have the cash, he's unlikley to be able to pay any tax either.

[foliedouce]

Eric Mc said:

If he can't pay the director's loan back to the company because he doesn't have the cash, he's unlikley to be able to pay any tax either.

Thanks

What about the £1.2m the company owes in tax? He gets away scot free on that one? nice work if you can get it.

[Countdown]

foliedouce said:

So he'll get away with not paying HMRC then and just have to pay the DL?

I'd be interested to know if the DL will be treated as income (and taxed) if he can't pay it back.

It's two separate things....the liquidators will chase ALL the debtors (including AM) then whatever funds they get back will be distributed amongst the creditors dependent on their ranking, which is usually as follows

Fixed Charge holders
Liquidators costs and expenses
Preferred creditors (incl HMRC)
Unsecured debtors

[foliedouce]

Countdown said:

foliedouce said:

So he'll get away with not paying HMRC then and just have to pay the DL?

I'd be interested to know if the DL will be treated as income (and taxed) if he can't pay it back.

It's two separate things....the liquidators will chase ALL the debtors (including AM) then whatever funds they get back will be distributed amongst the creditors dependent on their ranking, which is usually as follows

Fixed Charge holders
Liquidators costs and expenses
Preferred creditors (incl HMRC)
Unsecured debtors

Got that, but let's say he can't pay the £2.7m and has used that cash to buy assets in his wife's name, he declares himself bankrupt and the £1.2m in company tax is never paid back

Looking at the receivers notes, the only money they can go after is the £2.7m, the other debtor is circa £3k so chicken feed.