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Can HMRC make one company liable for the debts of anoother company?

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  • Can HMRC make one company liable for the debts of anoother company?

    Hello guys. Just wondering if i can get some
    advice?

    This is a pretty long winded but possibly quite unique set of
    circumstances.

    My Mother used to run one company and my Father used to
    run another. He. His company was then wound up by HMRc due to cash flow problems
    in relation to unpaid PAYE and NIC. My Father was then disqualified as a
    director for 5 years. He thought this was harsh but did not contest it due to
    very ill health at the time. HMRC then decided that my mothers company was
    liable for the debts of my Fathers company even though my Mother's company was
    completely separate from my Fathers. HMRC argued that the companies were inter
    related. My Mother NEVEr had anything to do with my Father's company. HMRC
    decided my mothers company was responsible for the debts of my fathers to the
    tune of £400,000. This has virtually left my family in a very precarious
    financial situation. Our accountant insists HMRC cannot make one company
    responsible for the debts of another. I would be so very grateful if someone can
    clarify this. We ran the companies for 25 years and were quite
    successful.

    UPDATE: They were in court on Monday and the Judge, who was awful apparently, refused to listen and kept insisting the company was insolvent, but it would not have been if the debt had not been attached.

    To conclude. Is it possible for HMRC to make one company
    liable for the debts of another?

    Thank you Guys!
    Tags: None

  • #2
    Re: Can HMRC make one company liable for the debts of anoother company?

    It sounds as if they have made an "association". Were the addresses of both the same or different? Think you may need specialist advice.

    Comment


    • #3
      Re: Can HMRC make one company liable for the debts of anoother company?

      Originally posted by ploddertom View Post
      It sounds as if they have made an "association". Were the addresses of both the same or different? Think you may need specialist advice.
      They were in the same business complex but this was also shared by about 6 other businesses.

      Comment


      • #4
        Re: Can HMRC make one company liable for the debts of anoother company?

        I agree, PT. This needs advice and assistance from a legal professional specialising in Company Law. As far as a Company Director Disqualification Order (DDO) goes, five years is lenient. The maximum disqualification period currently available to the courts is 15 years.
        Life is a journey on which we all travel, sometimes together, but never alone.

        Comment


        • #5
          Re: Can HMRC make one company liable for the debts of anoother company?

          Usually with HMRC it is hard to argue as all they need to do is to submit the "certificate" to the Court to say the tax is owed & the Court have to file in their favour, part of the downside with dealing with the Crown.

          Comment


          • #6
            Re: Can HMRC make one company liable for the debts of anoother company?

            Originally posted by ploddertom View Post
            Usually with HMRC it is hard to argue as all they need to do is to submit the "certificate" to the Court to say the tax is owed & the Court have to file in their favour, part of the downside with dealing with the Crown.
            This is true. I worked alongside HMRC officers (when they were H.M. Inland Revenue and H.M. Customs & Excise) when in the police. They have powers even police officers do not have.
            Life is a journey on which we all travel, sometimes together, but never alone.

            Comment


            • #7
              Re: Can HMRC make one company liable for the debts of anoother company?

              Originally posted by munden123 View Post
              Is it possible for HMRC to make one company
              liable for the debts of another?
              Yes, if it can be shown that they are interlinked. They have however to demonstrate that this is so. Wild allegations (don't forget that their staff are on commission), are not enough.

              You need to get some serious professional advice.

              Comment

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