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VAT and Corporation Tax Arrears

Q. I have worked as Limited Company for the past 10 years. My line of work hasn’t been very profitable during the past 5 years. My business account is now empty. I have diagnosed with cancer 12 months ago and have received treatment. It is too early yet to know if it was successful. I have VAT and Corporation tax liabilities which I am unable to pay. It is a worry. Can anyone advise on how I can get out of this mess? Any advice would be appreciated.

A. We’re sorry to hear you’ve had some recent bad news, we do hope you make a full recovery.

It is vital that you contact HMRC immediately to inform them of your circumstances and negotiate a time-to-pay-arrangement in respect of the VAT & C.T arrears. More information can be found here.

It may be that your company might have to ultimately enter into an MVL but we cannot advise on this. It is something you will need to discuss with your accountant.


By Contractor Doctor


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1 thought on “VAT and Corporation Tax Arrears”

  1. John

    Your company is insolvent.
    Write to HMRC explianing the situation,

    ‘It is with deep regret that I must inform you that the above company has ceased trading due to becoming insolvent. The difficult decision to cease all trading activities has been forced upon me so as to comply fully with my responsibilities in law as a company director.

    Unfortunately the company has insufficient realisable assets and no funds with which to appoint an insolvency practitioner and thereby initiate a voluntary liquidation. I am not in a financial position to fund this personally, having now lost my livelihood.

    The company therefore, will now lie in a state of ‘limbo’ until either Companies House strike it from the register or a creditor winds it up through the High Court, leading to the Official Receiver being appointed as liquidator. As you are a creditor of the company I would ask that you consider taking this step so as to bring about the early resolution of the company’s affairs.’

    wait 3 months and then apply to companies house to have the company struck off.

    HMRC will object to you applying to be struck off –

    wait 3 months and apply again.

    rinse and repeat

    eventually the company will be struck off

    Its called a limited liability company for a reason – you do not have to use your personal funds to pay off your company debt.

    Good luck with your health – concentrate on recovery rather than bs HMRC ‘debt’

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