Reply With QuoteHave you got HMRC investigation insurance with your Accountant ?
We have a LTD Co we are winding up, just waiting out the due process with companies house. Friday i receive 18 separate penalties from HMRC relating to Notification around C.I.S, dating back to 2019, this is the construction tax scheme for subcontractors. This along with all tax stuff and monthly returns were always exclusively dealt with by my Accountant.
I have emailed him with this and his reply is "I am sure we notified them we were leaving the scheme but don't worry they will issue a winding up order and company has no assets"
My question is relating to our credit rating going forward into the next few years as we are borrowing quite a bit for what we are currently doing.
Will being the ex director of a company wound up by HMRC have adverse effect on my credit rating?
Before i speak with him tomorrow i and getting my ducks in order.
Many Thanks,
Have you got HMRC investigation insurance with your Accountant ?
Originally Posted by SeePee
Probably not,
This will have come about solely by him or his staff not filing nil returns for this scheme.
HMRC have it set up so you must reply monthly even if you have no staff for that period.
Why weren't the penalties charged timeously? Did your agent also fail to notify HMRC you were due to submit CIS returns?
Personally I'd prefer to try to resolve what the correct penalties are, if any, before relying on the winding up to not have to pay.
I wouldn't expect ordinary investigation insurance to cover this even if you had it, as there's no compliance check involved.
We are shutting down anyway
Timing of penalties only HMRC know
Either the accountant failed to notify the Hmrc in the correct manner, a job he had done correctly for 2 years
OR
Hmrc have just gone on one
But its our credit rating as individuals we are concerned about
I appreciate that hence the reference to seeing if the penalties were due in the first place. I've no professional expertise with credit rating, however, my understanding is that it wouldn't impact the directors' personal rating but that it could be a consideration if you were a director of a company applying for credit in the future.
Thanks, i suspect the penalties will be correct as a result of my accountant being slack, WFH, staff WFH, covid etc.Same with HMRC as some of the penalties are dated 2019, if they had sent them out in 2019 it would only have happened for one period. I may have to settle them then look to recover from the accountant.
Why settle them if they’re fines in the company name and you’re winding it up anyway?
And being a Director of a company that’s gone into liquidation shouldn’t affect your personal credit rating unless you have Directors guarantees on any company incurred credit and you don’t settle it when the company goes into liquidation.
Might be worth a more detailed chat with your accountant as he may prefer the 'don't worry they won't need to be paid' option because it avoids any responsibility he has for the penalties being charged. There are a number of tax cases involving reasonable excuse based on agent advice resulting in penalties being cancelled so your agent may be able to refer to those. Good luck whatever
If im absolute of the no further impact on my credit rating then i wont settle.
Might be worth a more detailed chat with your accountant as he may prefer the 'don't worry they won't need to be paid' option because it avoids any responsibility he has for the penalties being charged. There are a number of tax cases involving reasonable excuse based on agent advice resulting in penalties being cancelled so your agent may be able to refer to those. Good luck whatever
I expect the truth may be one sided in that conversation.
Thanks for the replies spoilt my weekend a bit that fat envelope arriving.
HMRC guidance is here https://www.gov.uk/hmrc-internal-man...form/cisr81000 and this case might be of interest https://www.rossmartin.co.uk/sme-tax...-inappropriate.
I think the facts will speak for themselves so your agent may struggle if you were clear with them and followed their advice.
HMRC can be firm on penalties but also pragmatic sometimes, more so if the prospects for payment are minimal.
It’s a long time since I folded my firm up mate, so please don't take my opinion as gospel…..
if you’re not happy accepting your own accountants advice I’d strongly advise a quick chat with an insolvency practitioner.
I can't provide any definitive advice but I'd be nervous for various reasons about simply ignoring HMRC's communications.
Your accountant's statement that "I am sure we notified them we were leaving the scheme but don't worry they will issue a winding up order and company has no assets" strikes me as, at best, unprofessional. Firstly, if he is "sure" that's presumably because he has evidence in the form of a letter or email in which case you seem to have a good defence against the penalties - so why not use it? Secondly, if he is suggesting just completely ignoring the demands, rather than challenging them, there is (at best) the danger that you are made to look "guilty", ie, you accept the penalties were due. Does that then open the risk of HMRC coming after you personally:
https://www.accountingweb.co.uk/community/blogs/leshoward/penalties-made-on-directors-or-other-persons?
I'm not saying that HMRC can or will do that but your accountant needs to give a far more convincing response before I'd be happy with his advice. And, obviously, get him to put what he says in writing
Hi,
I'm no expert but have some experience unfortunately having had to put 2 (and nearly 3 ) companies into Insolvency and called to give evidence under oath to a formal investigation by The Insolvency Service ( and completely cleared ) and would definitely get some advice from a good Insolvency Practitioner as it may now not be a simple as you thought it may have been with no creditors.
They have cracked down recently and as an example HMRC are now classed as a Preferred Creditor if you owe them any tax that you should have been collecting on their behalf.
I'm not an Accountant or any type of advisor but with my experience as a Director would tread very carefully, it may be you have some redress through your Accountant but again that could prove costly.
https://www.gov.uk/government/news/c...to-evade-debts
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