My company owes HMRC corporation tax and VAT but I cannot afford the payment request

Question

I'm really worried and would like some advice please. I am the sole director of a limited company providing IT consultancy and have recently accepted a permanent job with another company starting in two weeks. My company will then become dormant. I have been naïve and silly and taken too many dividends and consequently can't pay back the corporation tax and VAT owed which totals £25,000.

I intend to write to my only creditor, HMRC, and inform them I'm no longer trading and will be issuing a strike off request. Will the company debts be written off or will the strike off be refused with the VAT man coming after me personally?

Answer

It is likely that HMRC will object to the striking off of the company whilst there is a tax debt or if any returns have not been filed, although it is possible you will “slip through the net”. You should bear in mind that a company which is struck off the register of companies can still be reinstated, so this is not guaranteed to be the end of your worries even if you do manage to have the company struck off.

In these circumstances we would recommend that you speak to one of our licensed insolvency practitioners who will be able to advise you on your options and assist you in ensuring the problem is dealt with, not just postponed. There are always solutions to any problem and we are here to help you.