Legal advice please!

richards30 said:
It’s done ok for itself no doubt but naively when online banking was set up we didn’t have a scooby so the wife done it and to keep on top of payments going out, wages etc she just dealt with that? Stupidly I never got involved with any of the accounts side of things as I trusted her implicitly as we have always been a proper loving couple? Never had a reason to doubt her and to be honest used to go through the end of year accounts doing the usual checking turnover, gross and net profit and then being shown our dividends we were entitled to which we declined to take every year as we do ok out of things anyway? Proper gutted it seems we have been mugged off and with us having three children and one of them with Down syndrome and awaiting another open heart surgery then I’m proper head frazzled over things at the moment.
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Fucking hell mate, that is a proper mess. Wish you all the best.
 
KnaresboroughBlue said:
I find it hard to believe that you haven't noticed £120,000 being paid out in dividends (or that your accountant hasn't mentioned it) every year for 12 years and that you also haven't noticed dividends being paid to you on your tax return and tax bill.

If true (and it seems so unlikely that I have my doubts), I don't know where you would stand legally. It seems you have personally signed off your company accounts and your tax return each year. As such, I suspect it may be difficult for you to prove that she took out this money without your consent all this time. Surely she'd just claim that you had authorised her to do this and that is proved by you signing off on the accounts and tax returns.

That you didn't notice dividends being paid on on your company accounts or your tax return and didn't notice you been paying such a large amount of extra tax every year seems rather suspicious to me.
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I'm 100% with you on this. I had my own company for 15 years, with me as the sole director but my son as minority shareholder (10%). I used dividends to help him with his living expenses while he was at uni but if I paid him £1,000 I had to take £9,000. Whether I actually took that was irrelevant, as that had to be my declared dividend, and I was taxed on that. However, I've no reason to disbelieve the OP, who has always been a sensible and intelligent poster.

@richards30 I seem to recall you live on the Isle of Man? If so the tax regime for dividends may be different but it's still all part of your income. And I recall from my own company that there has to be a documented board resolution covering the allocation of any dividends. Were you the sole shareholder?

I'm sure you're now kicking yourself that you failed to notice this over so many years and, I have to say, you've been negligent but what's done is done and it's easy to be complacent when you were presumably doing very well and didn't need to watch every penny.

When you say she was "booking it against my dividend" how was she doing that? However the money was going out - dividends, drawings, etc - it was still income that you should have been taxed on. Were you? My assumption is that she was telling herself it was being paid out as dividends, but not specifically recording it as a dividend in the books. That would make some sense about why your accountant knew you had signed a document not to take dividends and thought you weren't.

From what you've said, it seems your accountant was aware that a large amount of money was going out regularly, but unaware of the fact it was dividends and just thought it was general drawings. I think he should have brought this up much earlier and you need to ask him why he didn't. He may have been hoodwinked as much as you have but he's the professional and you should demand a full explanation.

But I'd suggest you get proper, specialist legal advice locally as a priority, rather than relying on Bluemoon. It sounds like a complete, life-changing nightmare. Hope you get it sorted out.
 
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Legal Beagles would be a better forum for you. I'd start there and also hire a lawyer.
 
Even by BM standards this is pretty out there.

I think you've already been given the most sensible/only advice which is to contact a respected legal firm and have an initial discussion with them to see where you stand legally. Best of luck with it.
 
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