Returning to a Tax Debt

[sampsos]

When I left the UK in 1996 my tax situation was paid up except that I had an overdrawn directors account. This was being dealt with with the tax office and my accountant wanted to post this as a divident but this was rejected, and resulted in a bill in the region of some 30,000 pounds.

I never did anything about it simply because I had no plans to return.

I know the company no longer exists, and is dissolved.

If I want to return to the UK what problems am I likely to incurr, and how do I found out if there is a still a debt?

I do not have 30000 pounds to pay, is it possible to come to a settlement with the tax offices before returning?

[Instinctive]

A £30,000 debt would imply that the overdrawn loan account was in the region of £125,000. This was a debt owed to the company and has presumably died with the company.

As far as the tax on Director's overdrawn loan account is concerned, this is a debt owed by the company to the Inland Revenue and I do not believe that it has any consequences for you.

Obviously, I do not know the circumstances in which the company was allowed to be dissolved with the loan still owing by you to the company and the tax still owing by the company to the Inland Revenue.

Ramnik
ramnikrp@hotmail.com

[JSK TAXATION]

Further to Instinctive's reply.

The Revenue would have had several options as regards the overdrawn loan account. If the tax on the loan was unable to be recovered from the company then the Revenue could have treated the loan as a payment of remuneration, calculated appropriate PAYE tax and NIC and sought to collect this sum from Sampsos personally.

However, from the details Sampsos provides, there is no reason to believe that was the case. In that event, one would imagine that the S419 tax went down with the company when it went into liquidation.

The situation is therefore thus:

If there was only S419 tax oustanding I do not think Sampsos has a problem.

If the Revenue issued determinations on him personally then they would still seek to collect this upon his return to the UK provided of course their records still exist!!

One final issue to consider is disclosure. Strictly sampsos should disclose the position when he returns to the UK to ensure compliance with his obligations as regards tax evasion and money laundering regulations.

If I can of further help by all means e-mail me at your convenience.

John King ATT
johnking@tax2002.fsnet.co.uk