In the attempt to minimise the financial impact of company liquidation, independent and professional insolvency advice could help to prevent you from committing a costly act of malpractice.
When your company is in the process of failing, it is understandable that you might seek to extract as much from it as possible, so you are left shouldering less of the financial burden once the company liquidation process is complete.
Professional insolvency advice can help you to do this in legitimate, acceptable ways – and avoid enforcement action such as that seen in one recent case.
The Insolvency Service investigated a 56-year-old Blaydon man and found that, for over a year, he had not kept up with his company’s VAT payments to HMRC.
Six months before his training and consultancy company went into liquidation, the sole director paid all of its trading income to himself, and then submitted a P35 tax return just weeks before liquidation.
As a result, there was an outstanding PAYE liability that could not be paid, creating a deficiency of over £160,000 owed to creditors including HMRC.
The man has now been disqualified from acting as a company director until 2017.
With professional advice, company directors facing similarly difficult decisions can ensure they make the correct ones – and avoid investigations and disqualification undertakings further down the line.
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