Limited companies pay corporation tax. You may also have to pay business rates on your premises.
Is a director liable for corporation tax?
It’s often the case that struggling companies do not make a profit, which makes corporation tax arrears less common. However, HMRC does have the power to make limited company directors personally liable for unpaid taxes where evidence shows the failure to make payments was deliberate or the result of neglect or fraud.
Why is my limited company not paying corporation tax?
Contractor’s Question: For the first time in my limited company’s three-year history, I do not have enough money to pay corporation tax and VAT; what are the implications? There are two reasons why I cannot pay. Firstly, I borrowed money from my company and, secondly, my IT contract came to an abrupt end.
What to do if contractor does not pay corporation tax?
“Often the only solution open to a contractor who has spent the money put aside to meet their limited company’s corporation tax and who does not have access to alternative sources of personal or other finance is to liquidate the company.” The closest HMRC comes to negotiating is by allowing a Time To Pay arrangement.
Is there penalty for not paying corporation tax?
Yes, there are fines for not paying corporation tax. Make sure you file your company tax return on time even if you can’t make the full corporation tax debt that is due. If you don’t file your return on time you may be charged a fine or penalty. For exact rates, see our full article on HMRC Tax Penalties and Late Payment Interest.
What happens if you have corporation tax arrears?
If you have corporation tax arrears and cannot afford to pay your tax debt, this means your company is insolvent. You are likely to need specialist help from licensed insolvency practitioners so please contact us: 08000 746 757.
