When a business finds itself unable to pay its debts it is important that all legal loose ends are tied up, before applying to strike off and dissolve the company. However, it is important to note that HM Revenue and Customs (HMRC) can object to the Strike Off application in much the same way as other creditors would. Therefore, closing a limited company with debts to hmrc must be done with expert help to prevent HMRC from pursuing any further action.
The HMRC is an organisation that administers the taxation system of the United Kingdom. It has several different subdivisions that are focused on different aspects of the taxation process. These include the Personal Tax Division, the Corporate or Business Tax Division, the Benefits and Credits Payment and Administration Division, as well as the Reporting and Compliance Enforcement Division.
Each of these divisions has their own specific focus, but they all function with the primary aim of ensuring that the UK’s taxation system is properly executed and adhered to. The HMRC also enforces strict rules and regulations in regards to money laundering, and the organisation has a dedicated department that investigates and prosecutes individuals who are found guilty of committing financial crimes.
As a limited company, you are required to file accounts with the HMRC and Companies House annually. These documents will contain various information about the company, including its profitability, assets and liabilities. In addition, all limited companies must maintain a range of statutory registers that are available for anyone to inspect. These include a Register of Members, a Register of Directors and a Register of People with Significant Control.
Aside from the filing requirements, all limited companies are expected to comply with the UK’s taxation stipulations. Failure to do so can result in heavy fines and even imprisonment. This is why it is so important for businesses to ensure that they are paying their taxes correctly and on time.
Nevertheless, some companies may find themselves struggling to keep up with their taxation obligations and this can lead to accumulating debts over time. In some cases, this can be enough to push a business into closure. Closing a limited company with debts to HMRC can be the best option for those who are struggling with financial pressures, as it will free them from their outstanding debt and provide new opportunities for future endeavours.
What are the consequences of failing to settle debts with hmrc?
Depending on the size and duration of any unpaid debts, HMRC is likely to pursue the company directors and shareholders for payment personally. In some instances, this can even lead to criminal charges if the company directors try to conceal or avoid their debts from HMRC.
As a result, it is crucial that any debts with HMRC are settled before applying to strike off and close your business. One way of doing this is through liquidation, where an insolvency practitioner will sell off all of the company’s assets to pay its debts, including any outstanding tax liabilities.