directors that I have spoken to regarding personal guarantees has rocketed for some reason. Some had decided to take a step back from running things and had simply forgotten to, or did not think to, resign at the bank before taking their leave. In some of the worst cases that I have had directors who had been retired for over fifteen years were being chased by banks for long forgotten personal guarantees.
Please remember that if you resign from a limited company or take no active part in management of it then remove yourself at the bank as a signatory. When writing to the bank, note the amount of debt at the time of resignation and ideally coordinate with payments due in so as to wipe out, or minimise any overdraft situation. This may not resolve all the personal guarantee issues, but it will help minimise your liabilities.
It never ceases to amaze me how little detail people sometimes get into when making major decisions. These decisions can and sadly often do affect their company’s future and their family’s, more importantly.
So remember, have protection in mind at all times and read it first before you sign anything. If in doubt, get specialist business advice.
It is worth noting that if you are dealing with the Debt Enforcement Unit within HMRC in Durrington Road, Worthing then your situation is very likely serious. Be aware that HMRC work extremely hard and I do have a lot of respect for them as they are working under quite challenging conditions. We have had a number of conversations with people working within HMRC who say things are going to get worse for them and they are concerned. New systems, new communications processes, low morale and pension cuts are just some of changes taking place internally within HMRC. These changes do appear to be having an impact, so please keep that in mind when speaking to HMRC.
In relation to the above, we help manage HMRC tax negotiations with limited companies on a regular basis and as HMRC stopped publishing statistics for the amount of approved time to pay arrangements back in 2011, the general consensus is that there is a definite downward trend. With many walk-in centres closing down nationwide and budgets being squeezed from all angles, HMRC are under pressure to bring in results under more challenging circumstances. Usually, there is a twelve month maximum time frame that is allowed, but I am seeing use of this time less and less, placing more pressure on directors to pay sooner.
A number of HMRC representatives have told us that they like the way we pull the time to pay proposals together. Apparently, we use more than the “back of a fag packet” sized space full of content which I am reliably informed is what the HMRC are used to seeing in a proposal.
To finish off; keep in mind when communication with HMRC that they are under a great deal of pressure at the moment. When it comes to signing important documents for your company as a director, it should go without saying, but always read it thoroughly and double check the small print to help prevent any confusion over personal guarantees.