Does winding up a company sometimes trigger a Investigation?

[TEDR]

Hello

Does winding up a company sometimes cause a tax investigation?, I sold my company assets in July, retaining the the company
and it's reserves. I had a bookkeeper for six years who was quite sloppy and liked to take short cuts, two years ago I managed
to replace her.

My plan now is to wind up take out the money the company and move on to other things, I have never had a tax or vat inspection in the nine years the company was trading. Is it a possible the inland revenue might decide because they have never had a vat or tax investigation of this business, that they should do one now when it's voluntary winding up?, if so, are they lightly to do one within weeks, months or years?

Many thanks for any views you might have.

[robbob]

Hello TEDR

All guesswork on my part - but i will give it a go
Thats a pretty good question - unless we have an ex revenue inspectors lurking who is happy to give some juciy gossip i doubt we would be able to find out the anser to this.

I would like to think in some respects the answer is yes as its their "best last chance" at getting any money back they are due if dodgy dealings have been going on - so if was in charge and the company was a potential case i would target businesses that have just ceased.
I guess there is also the opposite argument - that all businesses cease eventually so is there any more likelyhood of finding something wrong if they do inspect a cessation business? the answer is probably not - so is there any point in targetting these businesses?

In reality even if the % chances are higher it is much more likely than not that you will not get investigated - especially if you have been a compliant taxpayer - submitting records on time and paying tax when due.

One last thing - if there are any non standard entries on last set of accounts - this may trigger an investigation - such as removing assets at very low market - overdrawn directors loan - large unpaid liabilities on the balance sheet above what would be expected - not accounting for vat on assets or stock - the last set of accounts can be a little more tricky to do correct than a normal year.

If they do inspect you it will be unlikely to happen after the normal 12 month timeframe unless they find out you have made any errors or omitted relevant info from returns submitted.

[wamstax]

The short answer is tat it depends if there are any matters that ave been lurking in the background and HMR decide that tey need to investigate before your company gets away.

There are a number of things that can be done but you will never know if it creates an enquiry situation or not.

If for example you were confiodent that tere was noting untoward in your company's past tax history then you migt seek clearance to close the company down under Extra Statutory Concession C16 - see the link http://www.hmrc.gov.uk/manuals/ctmanual/CTM36220.htm
Now clearly if there is anything lurking it would bring it out of the woodwork if not you might be able to put the company to bed witout any expense of formal liquidation.

Alternatively you could just cease trading in the company and get the services of a liquidator to close the company.....................

Sadly as an Ex Inspector I am not willing to put all the secrets in the public domain and that will have to do for now. However assistance can be given in a proper and structured client /adviser relationship

regards and hope this helps
bill@wamstaxltd.com
http://www.wamstaxltd.com