The simple answer to this common question is, no – so please be assured.
They can only take property owned by the company – no hired or rented means, nor property under your own name.
If your company fails to pay its debts with HMRC, they will perform enforcement actions, to get the money they are owed. Only company assets and any personal guarantees become at risk – not your everyday personal possessions.
What enforcement actions are taken?
- Taking control of goods
- Court order
- Taken through your pension or earnings
- Debt collection agencies
- Direct recovery of debt
Being a sole trader or partnership, having unlimited liability. This means creditors like HMRC, can take personal assets of yours, if your business cannot pay what is owed. This occurs because of the same legal identity you and your business hold.
If your house is registered in the company’s name, HMRC can force the company into a compulsory liquidation, so that the property’s value can be realised and shared among the company’s creditors, to repay. Likewise, if the house is registered this way, it can be taken and sold, at any point, if you live in it or not.
If you have an overdrawn directors account. This is when you, as a director, owe the company money. This occurs when a profit-making company is advised to save tax by paying directors a small salary from the profit reserves, each month. The company has not paid the correct tax amounts, hence HMRC are chasing them up to do so. If a liquidation event occurs for the company, you will be chased personally as this is money owed to the company. Therefore, to pay the money owed, your personal possessions i.e your house or car, may be taken and sold for the correct value.
If your house was used as a personal guarantee for credit or other purposes, then being unable to pay your debts means your house would be at risk. It is difficult for houses to be repossesed under bankruptcy laws as it depends on lots of things like your dependents etc but the short answer is dont risk it!
Categories: Insolvency process