Please help with tax problems with my partner's business.

My other half has got himself into abit of a mess.
three 3yrs ago himself & another guy set up a business, but it was never organised right from the start.
After diagreements with accounts & sooooo many other things it has all been to much.
This was a limited company that the two of them set up & now my guy wants to leave.
For 3years solid they have worked unimaginable hours & not even taken a wage hopeing that this was the sacrifice needed for things to get up & running. He has been supported by me & his family, it has been such a struggle & it getting harder to survive.
All letters from the revenue were apparently ignored the VAT num was used on occasion but most suppliers were either up north or in England.
The company never made a real profit & always struggled to meet bills.
It is all just to much & we want to know where to even begin!?
It has caused so much depression & felt like a neverending nightmare, I am now very close to debt after trying to keep my boyfriend afloat for so long but I did not know the scale of how bad things really were managed/ or not managed, I think once he realise how bad things were he just stuck his head in the sand. The other guys intends to keep going ith the business prehaps uder a new name/ different location but that has not been discussed as things have not been civil between the pair for sometime.
But I just know he will just try & run away with all of this up in the air if we do't act fast!!
Any help/advice is greatly appricated

Re: Please help With Tax

boldbarry said:

My half has got himself into abit of a mess.
three 3yrs ago himself & another guy set up a business, but it was never organised right from the start.
After diagreements with accounts & sooooo many other things it has all been to much.
This was a limited company that the two of them set up & now my guy wants to leave.
For 3years solid they have worked unimaginable hours & not even taken a wage hopeing that this was the sacrifice needed for things to get up & running. He has been supported by me & his family, it has been such a struggle & it getting harder to survive.
All letters from the revenue were apparently ignored the VAT num was used on occasion but most suppliers were either up north or in England.
The company never made a real profit & always struggled to meet bills.
It is all just to much & we want to know where to even begin!?
It has caused so much depression & felt like a neverending nightmare, I am now very close to debt after trying to keep my boyfriend afloat for so long but I did not know the scale of how bad things really were managed/ or not managed, I think once he realise how bad things were he just stuck his head in the sand. The other guys intends to keep going ith the business prehaps uder a new name/ different location but that has not been discussed as things have not been civil between the pair for sometime.
But I just know he will just try & run away with all of this up in the air if we do't act fast!!
Any help/advice is greatly appricated

Click to expand...

To give a clear answer please supply more information

1. Is the company up to date in filing for Corporation Tax returns, Paye/prsi returns and Vat returns- A lot of the time the revenue are more concerned with the outstanding returns than collecting the money. Maybe the laiblities could be low
2. Based on one above is their much of a tax liablity outstanding.
3. Is company up to date with company office filing or has it being struck off involuntary.
4. Is company presently owe much money to trade creditors.
5. How much is each director owed via director loan account.
6.Is compnany due much money in.
7. Is company worth any value.
8. What is shareholding break up.


If everything up to date, maybe company worth little- maybe sell share for little value to other shareholder.

I would recommend you get a copy of all accounts together and go to your accountant or an indepenent accountant for advise.

Discuss maybe liquidation.

Discuss maybe Voluntary strike off- clean up affairs and go separate ways.

Re: Please help With Tax

Thanks for the reply,
no they are not up to date with corporation tax returns, PRSI/PAYE or VAT returns in all of the time the company has been running (Sept '07). I fear they went into this more naievely then I ever had presumed.
@ the end of year 1 after handing in all reciepts on a monthly basis into the accountant they found out nothing had been done with them. His advice was to just wind the company up stating it was not trading & that they had been very little work in an already over crowded market. He suggested the starting afresh with a new name & "new business".
But they did not do that, instead they registered a new name & that was all continued using the VAT number from the previous company name.
The accountant handed them back the reciepts & told them he wanted nothing more to do with it. He suggested just ignoring all letters from the Revenue which unfortunately is what the did, & up until now they have just continued to hold reciepts but not do a single thing else.
I am unsure how much taxliabilies there will be as up until recent months the Revenue & kept sending out forms requesting the returns, but as my boyfriend now wants to leave the business he wants to contact the Revenue & find out how much they owe, as understandably he does not want this mess to come back & haunt us in the future.
Forgive me, as details given to me sketchy but no I do not believe they are up to date with Company office filing nor have I been told of them being struck off, as my boyfriend continued to work on the trade he never once looked into or at any of this & had left it all up to his partner & his girlfriend who acts as receptionist out there.
The company presently owes €8000 to its suppliers, each director also owes €8000- €9000 in their own loans, but ha this is where it gets complex my boyfriends business partners girlfriend ( aka the receptionist) invested €16,000 when the company was set up, nothing was agreed or signed but she had hoped that when the business got up & running she would get that back along with abit more, @ the begining there was also 3 directors but one of them left after a continuing dispute @ the end of year 1.
Further on down the line, this "receptionist" invested a further €20,000 for machinery as the company had decided to expand & make their own PVC windows aswel as spray them various colours.
Again nothing was signed & again there was the understanding when the company was up & running she would get that & more back.
Now that my boyfriend is stating he wants out, she is threatening to sue him for his share of the €36,000. No longer saying it was an investment she & the other director are now saying it was a loan.
My boyfriend suggested selling the machiney even tho it would not cover the €20,000 but this was outrightly rejected as the other director does intend to go on with the window business in what shape or form I do not know.
I don't even know if she has a case but the prospect of count is terrifiying.
The company is of no value, not one single share had ever been sold apart from the 3 shares the original directors have.
I some how think they are of very little value.
It has turned into a living nightmare smothered in debt, my boyfriend has not recieved a wage in 3 years, I have barely carried him along which has left me suffering too, now I don't know what to do. I fear it will be such a serious mess trying to get out of it.
I am fearing his credit rating will be in tatters which obviously effects our future, not to menton the stress all of this is already putting on our relationship.

Re: Please help With Tax

boldbarry said:

Thanks for the reply,
no they are not up to date with corporation tax returns, PRSI/PAYE or VAT returns in all of the time the company has been running (Sept '07). I fear they went into this more naievely then I ever had presumed.
@ the end of year 1 after handing in all reciepts on a monthly basis into the accountant they found out nothing had been done with them. His advice was to just wind the company up stating it was not trading & that they had been very little work in an already over crowded market. He suggested the starting afresh with a new name & "new business".
But they did not do that, instead they registered a new name & that was all continued using the VAT number from the previous company name.
The accountant handed them back the reciepts & told them he wanted nothing more to do with it. He suggested just ignoring all letters from the Revenue which unfortunately is what the did, & up until now they have just continued to hold reciepts but not do a single thing else.
I am unsure how much taxliabilies there will be as up until recent months the Revenue & kept sending out forms requesting the returns, but as my boyfriend now wants to leave the business he wants to contact the Revenue & find out how much they owe, as understandably he does not want this mess to come back & haunt us in the future.
Forgive me, as details given to me sketchy but no I do not believe they are up to date with Company office filing nor have I been told of them being struck off, as my boyfriend continued to work on the trade he never once looked into or at any of this & had left it all up to his partner & his girlfriend who acts as receptionist out there.
The company presently owes €8000 to its suppliers, each director also owes €8000- €9000 in their own loans, but ha this is where it gets complex my boyfriends business partners girlfriend ( aka the receptionist) invested €16,000 when the company was set up, nothing was agreed or signed but she had hoped that when the business got up & running she would get that back along with abit more, @ the begining there was also 3 directors but one of them left after a continuing dispute @ the end of year 1.
Further on down the line, this "receptionist" invested a further €20,000 for machinery as the company had decided to expand & make their own PVC windows aswel as spray them various colours.
Again nothing was signed & again there was the understanding when the company was up & running she would get that & more back.
Now that my boyfriend is stating he wants out, she is threatening to sue him for his share of the €36,000. No longer saying it was an investment she & the other director are now saying it was a loan.
My boyfriend suggested selling the machiney even tho it would not cover the €20,000 but this was outrightly rejected as the other director does intend to go on with the window business in what shape or form I do not know.
I don't even know if she has a case but the prospect of count is terrifiying.
The company is of no value, not one single share had ever been sold apart from the 3 shares the original directors have.
I some how think they are of very little value.
It has turned into a living nightmare smothered in debt, my boyfriend has not recieved a wage in 3 years, I have barely carried him along which has left me suffering too, now I don't know what to do. I fear it will be such a serious mess trying to get out of it.
I am fearing his credit rating will be in tatters which obviously effects our future, not to menton the stress all of this is already putting on our relationship.

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In regard to €36k loan she would have to sue the company and in effect. I would not think she could go after you partner personally. even if she did and it went to commercial court, be seem as a loan to company similar to director loan. on winding up she could be well down the list(just my general opinion) dont worry about that €36k she knew what she was doing loaning the money.

If started in 07- They cant be that many returns to be done to satisfy revenue.

Companies office- Whatever day company incorporated in 07, within 6 months of this a b1 form had to be filed in companies office, say eg incorporated in sept 07 b1 march 08 with no accounts them next b1 in march 09 with accounts- note if these not up to date company incurring daily fine of 3 euro a day.

go to www.cro.ie and key in company number to company search and it tells you ard date and what is filed in company office if anything. Please note that if company office returns are as late as i think they could be you will need an Auditor & Accountant to file the accounts. If company gets struck off have 12 months to restore before you need to go to court to restore. If company is struck off involuntariy the directors become personally liable for ll debts.

The directors should come to aggrement to get all accounts and returns up to date and filed with revenue and company office- and decide them what to do going forward. Get everything up to date and them decide how to teriminate company. Note also for example if a revenue return is sent to sheriff even if nothing due they will issue an assessment and you have to pay estimate, interest and sheriff fees-could be costly.

The directors also have to file a Director tax return each year- surcharge for late filing based on paye deducted.

I think its time for all involved to come together and agree maybe on new accountant/auditor to bring it up to date- Note if the position is as above, I could see accountant/auditor looking for a payment of some of their fees on account.

It is awful situation to be in, but the tidy up and filing all o/s paperwork might make it a lot clearer of the exact position.

Get indepenent advice- Maybe offer you share to receptionist, if you feel your share worth nothing as it sounds like she is acting as a director anyway

Just be aware there are penalties for Directors for situations not unsimilar where a director may be percieved to be in breach of companies acts or engaging in reckless trading.

( I got the below from the companies act- was checking somthing out in work )

These include:

- the power of the Court to impose criminal and civil liability on directors for failure to keep proper books of account;
- the power to apply to Court for return of assets of the company improperly transferred;
- liability for fraudulent and reckless trading; and
- restriction of directors.

Personal liability for debts of the company

Although personal responsibility of directors remains the exception rather than the rule under Irish company law, when considering how and where directors duties are owed to creditors of a company it is useful to recall those situations in which personal liability will be imposed.
Fraudulent trading
Reckless Trading

Failure to keep proper books of account

Where a company is being wound up and is insolvent and it has failed to keep proper books of accounts in accordance with Section 202 C.A. 1990, the Court may declare that any officer or former officer of the company who is in default of this obligation to keep proper books is personally liable for all or such part of the debts of the company as may be specified by the Court where the failure to keep books contributed to the insolvency. Case law shows that the Court will impose liability for such amount of the company’s debts as are directly attributable to the failure to keep proper books. The Court may also find every officer of the company who is responsible for the failure guilty of an offence and a fine of up to €12,700 or imprisonment for a term not exceeding five years or both imprisonment and fine can be imposed.

There are 2 or 3 more but the above may be the most applicable here if going down the winding up route. (as a way of getting out) or strike off.

Not to scare you, but paper value is spot on. Get professional advice asap, even if it does cost a few quid.

Thank you so much, to be honest i am terrified as to how all of this is goig to pan out.
they seriously messed up & my partner is in such a bad head space now i am so scared he or i can't take much more.
its a terribley worry havn't slept in so long, it seems there is a very tuff road ahead & it not going to be easy to say the least
i am at an entire loss just feel like we are going to break down

Generally personal liability is the exception rather than the rule. I think with a bit of help youll get through it alright.
Get the advice and youll be able to form a plan and go do somthing about the problem.

Contact an insolvency practioneer. You need to pay for a liquidator to wind up the company. He will also advise you as regards potential personal liabilities. This is the solution. If his partners want to continue tell them they need to buy your partners share and he needs to resign as a director. This will protect him from the consequences of all future actions by the company. His partners have to be told - AGAIN - that the show is over. As often stated before it is far too easy to open a limited company in Ireland. Thats a debate for a different forum. I really feel for the OP, however it is now time to get tough!.

Thanks ever so much for all the advice @ this stage my boyfriend doesn't have a dime left to his name, & with all of this hangig over his head, filing for bankruptcy now seems the best option. i know it is a last resort but this is now looking like it is the only solution.
i am 25 he is 28, we havn't got a house yet, kids or a mortgage so maybe it is best, like i know it will effect his future long into the future but this mess is far to big & we are young enough to start afresh.
what does everyone think

Dont panic - as far as I can see I dont see much personal liabilities here. All of the liabilities seem to exist in the company. Liquidation of the company may not give rise to personal bankruptcy. Did your partner give any personal guarantees on the company debts? Bankruptcy only arises whereby you cannot pay personal debts. There are a number of ways to dispose of the company - but it will need co-operation from the other partners. Get family to rally around and seek help immediately. Its amazing what can be done in a few weeks. Use a provincial liquidator. Dont pay Dublin prices!

Boldbarry - as per simplyjoe, don't panic. Its not nearly as bad as you think and it is quite easily solved as long as everyone is honest to each other.

I'll do a more detailed reply tomorrow from a business & experience point of view that will allay many of your fears.

OK - Your partner is 3 years in business and the directors have effectively ignored all the rules & regulations regarding company law / accounts / returns etc.

Sounds utterly appalling, but there are many others who do this too. Some are punished severely others use the experience to learn and to move forward wiser for the experience.

In my own case, I went into liquidation due to massive hikes in rent, over expansion and paying out too much for various things including staffing, fitout, advertising etc etc. I learnt and even in this appalling recession, my current company is profitable & recently expanded in a very controlled way. (accountant won't allow me do anything without his approval)

First thing you need to do is write to the relevant revenue office explaining that you are taking immediate action to remedy all outstanding matters and that all returns will be made by November 30th.

Then you all need to have a meeting, preferably with an independent person as chairperson. (accountant, mutual friend, solicitor). Possibly get everyone to sign a letter stating that no grudge will be borne out of anything said or unearthed at the meeting. At this meeting everyone must be 100% honest and decide what each person wants to do in the short term and the medium term.

After this, you will need to get an accountant to get your books in oorder. If turnover has been relatively low (under €1m) and the bulk of paperwork is there, this should not be too much of a job to get completed. - ideally seperate all paperwork into individual months.

Assuming you get a good accountant, do EXACTLY as he says. This will help enormously if there is a revenue audit of the company - the revenue will see that controls are in place and will take a much more lenient view of things.

Regarding company debts etc - as its a limited company there should be no personal liability for these, unless it can be proven it traded recklessly (a good accountant will ensure this won't come to pass).


Yes things are bad, but you need to seperate business from personal life and if the business is not providing the income, accept failure. Failure in business does NOT mean failure in life and in many ways ensures future success (ask Richard Branson).

You do need to be honest, you do need to seperate business from personal, you do need an accountant, you do need to follow his/her instruction to the letter and you don't need to be afraid.


Final point - Revenue officials are human, (I have 70 of them directly across from my office), they love honesty and will help as much as they can of they see any glimmer of hope or genuine attempts to make things right.