I took too much money out of my company last year and ended up with an overdrawn directors’ loan account. I now want to resign as a director and move abroad but I’m being anchored by this overdrawn DLA. I told HMRC that I don’t have the money to repay it and after months of letters back and forth, a bailiff turned up at my home today (registered office) with a Notice of Distraint.
What does this mean? Can they take my personal possessions or even repossess my home? The overdrawn account is only around £12,000.
A bailiff who is instructed by HMRC to collect a company debt can only distrain over the company’s property, not over the assets of its director – even if you owe the company money – in the absence of a court order known as a third party debt order (“TPDO”).
Only the company – or a creditor of the company who has obtained a TPDO – can pursue you for monies you owe to the company. Accordingly it appears likely the bailiff is seeking to seize the company’s property not your property.
If you are considering emigrating it may be worth considering a voluntary liquidation of the company which will allow you to resolve the overdrawn loan account and get on with your life.