Not paid tax for 10 years. Help!

Breakingpoint_3
Breakingpoint_3 Posts: 9 Forumite
edited 25 February 2011 at 3:39AM in Cutting tax
Right. I know I am the biggest idiot ever and I have no idea how this has happend but I have got into the worst predicament.

I am a computer programmer. Up to 2000 I worked PAYE then made redundant - Since then I have been Freelance with only a few clients all paying me by cheque - Somehow I thought tax was paid at source. I have found out this was wrong about a year ago - I've never been taught any financial lessons at all. I know I am nieve and stupid.

My pay has been sporadic from 10K up to 35K I would estimate. I've had 1 bank account in that time and it all went though there.

I am of course terrified of a huge bill, I won't be able to pay in one go, and possible prosecution ( although I understand that HMRC are keen to avoid that as it's not productive nor helpful )

Now I want to right these wrongs. Are there specialist advisors on these matters? I am in the south London area?

Thanks
«13456

Comments

  • PlutoinCapricorn
    PlutoinCapricorn Posts: 4,598 Forumite
    First Anniversary Combo Breaker
    edited 25 February 2011 at 6:48PM
    There have been people on MSE before in your position. They were all encouraged to own up and pay up.

    If you report yourself to HMRC and cooperate with them, the penalties may be less than if they discovered you themselves. There will be interest to pay too. You might be able to get them to agree to a payment plan.

    Did you ever register as self employed? Have you been paying any National Insurance?

    Did you invoice your clients, and can the amounts be matched with payments on the statements?

    I was a computer programmer, and find it difficult to believe that anyone with that kind of mind could get into this situation.
    Who having known the diamond will concern himself with glass?

    Rudyard Kipling


  • Will PM you.
    Cash not ash from January 2nd 2011: £2565.:j

    OU student: A103 , A215 , A316 all done. Currently A230 all leading to an English Literature degree.

    Any advice given is as an individual, not as a representative of my firm.
  • Sounds great to me. Its what we all should be doing and we would all be alot richer if we did. Dont tell them anything untill you have sorted yourself out.
  • You need to own up. If you are honest with them and co-operate, you'll end up in a better situation.

    There will be tax, interest and penalties to pay, but best to be honest upfront.

    You mention you realised about a year ago that this wasn't being taxed, why didn't you do anything about it then?

    If you are in doubt, you could ask an Accountant to sort it out for you, obviously for a fee.
  • If you report yourself to HMRC and cooperate with them, the penalties may be less than if they discovered you themselves. There will be interest to pay too. You might be able to get them to agree to a payment plan.

    Did you ever register as self employed? Have you been paying any National Insurance?

    Did you invoice your clients, and can the amounts be matched with payments on the statements?

    I was a computer programmer, and find it difficult to believe that anyone with that kind of mind could get into this situation.

    Yes I understand - I do want to get myself straight.

    No not registered.

    Yes Payments can be matched against invoices.

    I know. But I genuinely believed that tax was paid by the vendor - If I'd known I would have just charged more and paid up! I am an idiot and was also a lot screwed up for a number of years due to insomnia / alchohol.

    But I am not here to pour out past woes - Life is great other than this now and I need to get it sorted.
  • You need to own up. If you are honest with them and co-operate, you'll end up in a better situation.

    There will be tax, interest and penalties to pay, but best to be honest upfront.

    You mention you realised about a year ago that this wasn't being taxed, why didn't you do anything about it then?

    Thanks - I plan to be. I found out how wrong I was a year ago - but as posted above. I was a bit of mess basically between 2003-09/10.
  • Sounds great to me. Its what we all should be doing and we would all be alot richer if we did. Dont tell them anything untill you have sorted yourself out.

    Not sure that helps matters.
  • Mikeyorks
    Mikeyorks Posts: 10,369 Forumite
    First Anniversary Combo Breaker
    Not sure that helps matters.

    Quite right - unfortunately morons are also allowed to post.

    This is one of those areas where sourcing an accountant and getting them to prepare the accounts - and pave the initial contact with HMRC ....... may cost you less overall. Worth considering as it also keeps some of the stress at arms length?
    If you want to test the depth of the water .........don't use both feet !
  • Mikeyorks wrote: »
    This is one of those areas where sourcing an accountant and getting them to prepare the accounts - and pave the initial contact with HMRC ....... may cost you less overall. Worth considering as it also keeps some of the stress at arms length?

    Yes. I can see that an accountant is going to give me some perspective at least.

    A few Questions.

    1. Can anyone give me a rough estimate on how much an accountant would cost to prepare accounts from my invoices and bank statements? I Know this is a hard question to answer - but would rather be prewarned.

    2. Are HMRC likely to speak to my partner? We have a joint Bank account for Bills etc.

    Thanks for everyones advice.

    Anyone else been in a similar situation?
  • I hope that one of the ex HMRC people on MSE will come along and give good advice. I do know that there are offices where you can go in and get advice directly from HMRC.

    There was someone on MSE last year who said he would go and own up, and we asked him to report back on how he got on but he never did!

    For each tax year, the personal allowance would be different, as would the bands. You would need the income and the legitimate expenses to arrive at the taxable profit. Have you got the figures for the expenses? Normally, for self employment there is a figure (now £60k I think) and if you earn under this you just need 3 totals: total income, total expenses and profit. But in your case, HMRC might want to see evidence for everything. Have you got your old electricity bills etc?
    Who having known the diamond will concern himself with glass?

    Rudyard Kipling


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