Sorting out my LTD company tax

UK PROFESSIONAL DRIVERS FORUMS THE UK PROFESSIONAL DRIVERS FORUM (INTERACTIVE)
1

Long story short, I worked last year for a few months as a LTD company driving via an agency, earned in total just under £5400, prior to those months and after I was employed under the PAYE scheme and played my tax,ni etc accordingly via my employer.
I’m now no longer employed due to medical reasons and am worried I’m going to be in deep ■■■■ if I don’t file a tax return for that period I was a LTD company.

I’ve applied to companies house to have my “business” removed from the register, and the only accounts I have are emails from the Bookkeeping and accountancy firm who my agency used stating what I earned, and a figure which corresponds with what went into my bank account.

Nothing in the way of expensives, just my total pay before ni or tax deductions.

Do I need to see an accountant with this info for him to tell me my tax or do I simply deduct a percentage of the £5400 for the taxman and file online myself?

I need the simplest and ideally cheapest way to do this as I’m now alas on benefits, and the sooner the better, my health is not good and worrying about this,which I am, isn’t helping me!

I dearly wish I’d just gone paye with the agency in question but alas didn’t.
I just need pointers in the easiest way I can get this paid and off my back so I can forget about it and concentrate on my failing health.

Any help or advice appreciated sincerely.

Thanks…

2

Once the company is dissolved, you won’t need to submit any returns to HMRC. Legally, they still need to be submitted (made up to the date of dissolution), but HMRC won’t chase you for them. If your Corporation Tax is already due/overdue, you need to get the returns submitted ASAP. HMRC, or other creditors, can object to a voluntary dissolution / strike off.

If your affairs are relatively straightforward, you don’t need an accountant, just do your sums, get your figures together and correct, and fill in the online CT600.

How were you paying yourself: did you set yourself up as an employee, and pay yourself through PAYE, deducting tax/nics? Or did you just pay yourself dividends? Or, did you just bury your head in the sand and just take money out of the business when you felt like it and not really think about how to deal with the legal/tax side of it?

That last question wasn’t meant to sound as cheeky as it does, but if that’s what you’ve done, then yes - get to an accountant ASAP.

HTH.

3

Why oh why do people

  1. Use umbrella Co’s?
  2. Go ltd Co for such short periods of time?
  3. Go into situations so blindly?

Go see an accountant ASAP and let them sort out the mess the umbrella Co put you in, pay the accountant to finalise the accounts and wind down the Co properly. Because in the long term this will give you less of an headache with HMRC, and finally try not to spend the £5400+ before settling your debts with HMRC.

You did set aside the £5400+ And not spend it didn’t you?
Because irrespective of not if you paid NI & PAYE, your company will still owe the VAT accrued via the basic rate scheme the payrole Co put you on, employers NI, and deffinately corporation tax. If you haven’t got any of the monies left to pay the bills, get ready to be ■■■■ raped by HMRC.

4

£5400 was my total earnings for the period I was working as a LTD company, I’m assuming I owe a percentage of that amount as tax and N.I.

It was paid into my bank account (I don’t have a business account) and I used it to live on, I have funds (albeit not a lot) to pay what I owe, as I say, I merely have records of what was paid to me over the period gross, I.e. without tax or N.I. Deductions.

Yes, I went into it blindly, I was under the impression from the agency who talked me into this that the umbrella company would sort all of this out for my weekly admin fee (£25 iirc) which they haven’t and I’ve had no reply to my subsequent correspondences with them, so I’m giving up on them and want to sort it myself.

I’ve been advised by a mate to submit the figures I was paid and deduct at least say 20% (?) for tax (better to overpay than under as I understand) and HMRC would then advise if I have paid too much and advise me accordingly…
Yes, I regret going down this route for what was only a few months work,but, it’s done now and I just have to pick up the pieces…

As I see it, my affairs are straight forward, I have a series of emails that state my income and the dates, week numbers etc and bank statements that tie in with this, I haven’t made any expense claims so, as I understand it, have the ~£5400 figure from which I need to deduct whatever tax I owe and submit it, maybe with a covering letter explaining what a tool I’ve been and hope they see I’m just trying to correct my situation! I’m assuming an accountant would make light work of this if I present him with this somewhat basic information, but worry what they will charge me for this, I guess I need to find a local accountant and have a word…

The period I was working as Ltd was June 2014 to September 2014, and yes I would strongly advise people don’t go down this route unless they know exactly what they are doing, it’s caused me no end of sleepless nights which could - and should - have been easily avoided.

Thanks for the replies thus far. :slight_smile:

5

If £5400 was the net figure paid into your bank, what was the gross figure (inc VAT) paid by the agency prior to umbrella fees??

Get an accountant on the case PDQ
At a rough guess (worse case scenario) I’d say the amount you paid in personnel NI contributions, you’ll pay again in employers NI if you where setup by the umbrella Co as both employer and employee, and guessing again that the % rate of PAYE is similar to the % rate of corporation tax, use that as a guide amount you’ll owe.
Then factor in the VAT owed on the gross figures you have. Because as many seem to be finding out the umbrella Co may have pocketed the VAT money. Then you will have a rough estimate figure you’ll own HMRC.
Then add £100-£600 for the services of the accountant and overall your facing an eye watering bill. Then once the bills are paid & the dust settles, stick all records & documents relating to your former company in a safe place for several years so that you comply with the record keeping rules for running a company

6

Ok, sounds like this will actually be fairly easy to sort out, probably no accountant necessary. Will drop you a PM.

7

I’ll take a wild guess that if he paid himself £5400 via the umbrella Co, his gross would’ve been £7500-£8000 assuming he worked 5 days throughout his short agy life, 16 weeks.
Assuming average weekly gross (inc VAT) was £500 pw. Roughly £1000 of that would’ve been VAT, if the umbrella Co did its usual thing, of setting the driver up on the small business vat scheme, then around £500 is in the ethos of umbrella bookkeeping, which could still be due to HMRC. If £5400 went into the bank without claiming expenses etc then there’s potential for £1100-£1200 due in corporation tax. A figure that an accountant could possible reduce significantly by factoring in expenses. Around 12% of gross will be due for employers NI (let’s say £600-£760) but as the PAYE threshold for 2014-15 was around £10k, there maybe no PAYE to pay unless he undertook other work that tax year.

As I said it’s only a wild guess

8

Why would VAT be included, registration is not compulsory if turnover below £82000. I am aware of the benefits of limited company or self employed drivers registering for the flat rate scheme but it is not compulsory.

9

matamoros:
Why would VAT be included, registration is not compulsory if turnover below £82000. I am aware of the benefits of limited company or self employed drivers registering for the flat rate scheme but it is not compulsory.

you’ve answered your own question, most do register as its financially advantageous to them. So the worse case, its better to assume that theres possibly VAT due.
Also its highly likely, as the OP was getting paid via the agencies umbrella Co, he would’ve been setup by them (as most drivers where) on the small business VAT scheme by the umbrella Co.
Whether he actually benefitted out of the VAT or was actually registered, only he can say. But that maybe another question he should as the umbrella Co before walking into the shadows