VAT investigation after leaving company

[thisislife]

Hello all...
I have a question and was wondering if anyone on here would be able to advise. I was the director of a small Ltd for about 2 years but was bought out by the other director for an agreed sum last Autumn. The other director (is nw the sole director of the company) has been back in touch with me today saying that the VAT man wants to go through records from the date of VAT registration up untill the last return. The comapany registered for VAT back in Nov 2007.

The current director has put it to me that if there is a bill to pay as a result of investigation i will have to pay 50% of it. Does anyone on here know if this is true or not or is he trying to have the wool over my eyes?

I legally left the company and my name is no longer on any of the paperwork etc so will this legally effect me? i.e if there is a bill will the VAT man make it out to me and the current director or just the current director? Obviously i know the Ltd is a seperate entity to the director but you see what i mean with regards to who pays the bill.

Your views would be greatly received.

Regards

Richard

[AndyAudi]

Were there any documents or paperwork drawn up when you sold your share to the other director?
If so did these state anything you may held liable for in the future?

[thisislife]

No it was literally a pay out and i removed my name from companies house, bank account etc etc.

[dcw@pr]

my gut reaction would be that you are in the clear

imagine if he found that one of your clients hadn't been invoiced for something back then, would he give you half of that amount now?

[plasticpig]

I cant see that you have any financial liability if its just a case of honest mistakes. If there was serious fraud discovered then you be potentialy liable as a director.

[Ash 996 GT2]

plasticpig said:

I cant see that you have any financial liability if its just a case of honest mistakes. If there was serious fraud discovered then you be potentialy liable as a director.

Yup.

[dcw@pr]

and another thing...

we had a vat inspectiona couple of weeks ago - end result was (AFAIK) that we were all correct. So don't assume that they will find a liability (or perhaps you know otherwise? )

[JustinP1]

And if the investigation finds that you overpaid during that period, he also mentioned that he will send you half!?


My guess is not. You have no financial association to the company whatsoever. Don't even get involved.

[Soovy]

Ash 996 GT2 said:

plasticpig said:

I cant see that you have any financial liability if its just a case of honest mistakes. If there was serious fraud discovered then you be potentialy liable as a director.

Yup.

+1

Did you not document your exit from the company using a proper legal document stating how the liabilities would be dealt with post exit?

[northandy]

thisislife said:

Hello all...
I have a question and was wondering if anyone on here would be able to advise. I was the director of a small Ltd for about 2 years but was bought out by the other director for an agreed sum last Autumn. The other director (is nw the sole director of the company) has been back in touch with me today saying that the VAT man wants to go through records from the date of VAT registration up untill the last return. The comapany registered for VAT back in Nov 2007.

The current director has put it to me that if there is a bill to pay as a result of investigation i will have to pay 50% of it. Does anyone on here know if this is true or not or is he trying to have the wool over my eyes?

I legally left the company and my name is no longer on any of the paperwork etc so will this legally effect me? i.e if there is a bill will the VAT man make it out to me and the current director or just the current director? Obviously i know the Ltd is a seperate entity to the director but you see what i mean with regards to who pays the bill.

Your views would be greatly received.

Regards

Richard

I'd think you were fine, however I do find is slightly suspicious that hes contacted you and told you "if" theres a bill you'll be expected to pay half, sounds to me like he's expecting one, did you sign any of the Vat returns ?, could he have done anything dodgy without you knowing ?.

[Soovy]

northandy said:

thisislife said:

Hello all...
I have a question and was wondering if anyone on here would be able to advise. I was the director of a small Ltd for about 2 years but was bought out by the other director for an agreed sum last Autumn. The other director (is nw the sole director of the company) has been back in touch with me today saying that the VAT man wants to go through records from the date of VAT registration up untill the last return. The comapany registered for VAT back in Nov 2007.

The current director has put it to me that if there is a bill to pay as a result of investigation i will have to pay 50% of it. Does anyone on here know if this is true or not or is he trying to have the wool over my eyes?

I legally left the company and my name is no longer on any of the paperwork etc so will this legally effect me? i.e if there is a bill will the VAT man make it out to me and the current director or just the current director? Obviously i know the Ltd is a seperate entity to the director but you see what i mean with regards to who pays the bill.

Your views would be greatly received.

Regards

Richard

I'd think you were fine, however I do find is slightly suspicious that hes contacted you and told you "if" theres a bill you'll be expected to pay half, sounds to me like he's expecting one, did you sign any of the Vat returns ?, could he have done anything dodgy without you knowing ?.

If something moody went on when you were a director, you'd better get some legal advice quickly.

[thisislife]

Hello everyone,
Wow thanks for all your replies! I must say i only joined piston heads yesterday but this is an excellent business chat forum.

It was me that did the VAT returns and i know they were all spot on. Never swindled a penny, i always copleted them with the thought of "if we ever got looked into". I didnt want the sleepless nights so everything was always done properly.

I think ill just put the point accross that im not legally bound so wont be getting involved. In the same instance i wont expect any extra money to come to me in case it went in favour of the company. (fairs fair.)

I didnt do any legal doc when i left detailing these sorts of point so i think a lesson learnt here.

Thanks for all your help!

Richard

[Eric Mc]

I doubt if you'll have any problems but if there are any errors to be found but they were down to honest mistakes, I am pretty sure you would be in the clear.

Directors can and do have responsibilities that can carry on after they have resigned as directors - so you do need to be careful.

[Soovy]

thisislife said:

Hello everyone,
Wow thanks for all your replies! I must say i only joined piston heads yesterday but this is an excellent business chat forum.

It was me that did the VAT returns and i know they were all spot on. Never swindled a penny, i always copleted them with the thought of "if we ever got looked into". I didnt want the sleepless nights so everything was always done properly.

I think ill just put the point accross that im not legally bound so wont be getting involved. In the same instance i wont expect any extra money to come to me in case it went in favour of the company. (fairs fair.)

I didnt do any legal doc when i left detailing these sorts of point so i think a lesson learnt here.

Thanks for all your help!

Richard

As Eric (the guru) says, you do have responsibilities which survive your exit from the company - so you could be involved in the investigation. However, if you've always played it down the line you have nothing to worry about, assuming you have complied with them.

Let us know what happens.