Scotland Liquidators Arbroath
Scotland Liquidators has licensed insolvency practitioners covering various regions in Scotland, such as Arbroath, the largest town in the area of Angus. Home to the famous Arbroath Abbey, and located on the North Sea Coast, the area is known for its natural beauty. With over 35 years of experience in assisting company directors with liquidation options, our team of experts are well positioned to guide you through finding the right procedure for your business.
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Creditor’s Voluntary Liquidation in Arbroath
If your company is facing insolvency, we can provide the best liquidation advice to assess your financial position and identify the most appropriate route going forward. There are two main types of liquidation, a Creditors’ Voluntary Liquidation (CVL), and a Members’ Voluntary Liquidation (MVL). The procedure chosen depends on whether your company is classed as solvent, or insolvent. If your business has been struggling with debts and pressure from creditors, your appointed insolvency practitioner can direct you through a Creditors’ Voluntary Liquidation process.
As a limited company director, it is vital to seek immediate advice when facing insolvency, and take the appropriate action to shield creditors from any further losses. Failure to do this may see you face compulsory liquidation in which your company is forcibly wound-up by the courts. We understand the difficulty of being in such a situation, and our specialist team can guide you through the entire process to resolve your current position.
On the other hand, if your company is solvent, meaning it does not have any debts, we can assist with a Members’ Voluntary Liquidation. This is a tax-efficient method of closing your company when it has served its purpose, and you may be either seeking to begin a new project, or retire your operations. Our licensed insolvency practitioners can act as liquidators to help wind up your company, and officially remove it from the Companies House register.
Get in touch with our team today for a free initial consultation in which we can assess your companies’ current financial status and discuss the options available for you. With offices in Aberdeen, Edinburgh, Glasgow, Inverness, and Dundee, our team can assist you wherever you may be based.
Closing a Scottish limited company with HMRC debts
If your limited company is no longer financially viable and you have tax debts you cannot pay, closing it down can be an effective way to escape the financial pressure so you can move on to something new.
As soon as you become aware your company is insolvent, you should cease trading and seek professional advice from an Insolvency Practitioner. Your legal duties as a director now switch from promoting the success of the company to acting in the best interests of your creditors (parties you owe money to). By ceasing trading, it prevents the company from building up further debts it cannot pay that you could be made personally liable for.
Once you have ceased trading, you can voluntarily enter the company into a formal insolvency procedure called a Creditors’ Voluntary Liquidation (CVL). You must appoint an Insolvency Practitioner (IP) to act as the liquidator. They will take control of the company, invite claims from your creditors and sell off the company’s assets to raise money to repay HMRC and any other creditors.
The liquidator will repay your creditors in a strict order. As long as you have acted according to the insolvency rules, any debts the company cannot pay in full, including the company’s tax debts, will be written off. You’ll only have personal liability issues if you have signed a personal guarantee to secure company borrowing.
Why you need to act quickly with HMRC debts
Owing money to HMRC is not unusual. Most businesses in financial distress will have some form of tax debt. As the most common creditor in the UK, HMRC has strong powers of debt enforcement and will act quickly to recover its money and prevent you from accruing further tax liabilities you cannot pay.
It might be possible to negotiate a Time to Pay arrangement with HMRC, which will give you more time to pay what you owe. However, if your business is no longer financially viable, it’s in everyone’s best interests to close it down.
If you do not enter the company into liquidation voluntarily, HMRC can issue a Winding Up Petition to force the business into Compulsory Liquidation. As part of the process, the liquidator will investigate the reasons for the insolvency and the directors’ actions. That increases the likelihood that you will receive a penalty, such as being made personally liable for company debts or being handed a directorship ban.
Can I dissolve a company with tax debts in Scotland?
You might have heard of Company Dissolution or Strike Off as a way of closing your company. However, only solvent businesses can use this process. To dissolve your company, you would have to contact HMRC to settle your tax debts and repay all your other creditors in full. Only then could you apply to Companies House to strike your business off the official register.
If you try to dissolve a company without paying your tax debts, HMRC will formally object to your application. You could also face serious reprisals from the Insolvency Service, as it will be noted that you tried to use the strike-off process to avoid paying your debts.
Why close a company with HMRC debts via a Creditors’ Voluntary Liquidation?
If you want to close your limited company and have tax debts you cannot pay, you have two options. You can:
- put the company into liquidation voluntarily via a Creditors’ Voluntary Liquidation (CVL); or
- wait for HMRC or another creditor to force you into Compulsory Liquidation.
There are several benefits associated with taking control of the situation by initiating a CVL:
- You can decide when you enter liquidation and appoint your choice of liquidator.
- The liquidator will still scrutinise your conduct, but there’s less risk that director misconduct allegations will be made against you.
- If you have worked as an employee of the company for a minimum of 16 hours a week for at least two years, you could be eligible for company director redundancy pay.
If you’re unsure of your next steps or want to know more about how to close a limited company with HMRC debts, please contact the team at Scotland Liquidators. We offer free same-day consultations and provide expert guidance and support throughout the process.
I knew I needed to close my company but I wasn’t sure how to go about this with large debts that I was unable to repay. Scotland Liquidators clearly explained my options and held my hand throughout the entire process.
Catherine Muller | Director
I would highly recommend Scotland Liquidators to anyone considering closing their business. From the first phone call I knew where I stood and what my options were. I cannot thank them enough.
Jonathan Booth | Director
Scotland Liquidators helped me close my company last year after I made the tough decision to stop trading. My advisor was patient, knowledgeable, and supportive from start to finish. Many thanks.