Do i stop paying now?

excel1

Hi,

Was getting out of debt quite well until thursday when my meeting with HMRC decided that whilst i cannot prove all my outgoings i would be liable for tax(my fault my records i suppose just thought being upfront and honest would help, stupid me!) and have hit me with what can only be discribed as a ridiculous bill, and there chance of getting that(subject to tonight lottery draw of course ) is zero, now i am quite clearlt going to have to go BR, but do i stop paying my creditors now, or wait for the full demand to hit the mat and then the collectors for HMRC come round realise i dont have the money nor the assets and make me BR, or do i continue to pay until such time that the inland revenue are ready to make me BR?

december

Hi,
I'm not very good with business type questions but would advise that you call one of the debt charities for their advice. I would also say that it's up to you which you would prefer to do. If you make yourself bankrupt then you have some control over the date and the proceedings, if you wait for HMRC to do it then it will be at their convenience. Hopefully someone more knowledgeable than me will be along shortly.
December

jo70

Contact an 'expert' asap. Whether it's the CAB NAT DEBTLINE or not-get some advice.
Wish we could help you more
J & A

deedee_3

CCCS have a business department you can talk to and there is also Business Debtline to talk to.
Consumer Credit Counselling Service - Website: CCCS Telephone: 0800 138 1111

Business Debtline - Website: Business Debtline Telephone: 0800 197 6026

Are you wanting HMRC to make you bankrupt or are you wanting to do so your self.?

excel1

i dont know really, i am able to pay for it as i had dug myself out of the hole, my debts were down from £80k to £15k and my credit file was getting better defaults dropping off so may have been able to refinance last debts early next year and move forward, but cant really do it till they send formal demand out but didnt know if it would go against me if i stop paying now whilst i can afford it, as opposed to when they send the LADS round as it were.

fiveyearplan

HMRC are a law unto themselves and really make no 'business' sense at all. If you have cleared that amount of debt in such a short space of time I'm sure you'd be able to clear your tax bill however HMRC won't usually wait. If you decide that you have no option but bankruptcy I'd stop paying all creditors now! You will need to put that money aside a) for your bankruptcy fees b) any emergencies that come up. Remember you'll have no credit cards afterwards.

Is your business sole trader, limited etc? I agree a phone call to BDL is in order. If you are sole trader all your debt goes into BR. If you are Ltd Co and you are the only director then your debt should also go in BR (especially the ones you gave a personal guarantee for).

Good luck, let us know what BDL have to say. Also you'll want to ring National Debtline or CCCS regarding your bankruptcy.

rog2

Hi excel

It is extremely difficult to 'deal' with HMRC - as already stated, they act as if they really are a 'law unto themselves'.
My circumstaces were similar in that HMRC 'hit' me, continuously with 'demands' that were quite simply figures plucked out of the air. To add virtual insult to injury, they applied fines and penalties on an almost daily basis, even though I was trying my hardest to discuss my tax situation with them. In my case it was quite simple - the business had literally 'died', my turnover had gone down from in excess of £300k to less than £25k, yet they still 'assessed' me as owing them £65k in tax for two trading years - with penalties, charges and interest, by the time they took me to court for the initial CCJ this 'bill' had become over £83k - on my bankruptcy petition, it ad further escalated to £86k. The 'accountant' who had promised to help me on a no-win, no fee basis, was about as much use as a glass hammer.
I did ask HMRC for help, I took my records down to the local 'collection office' on three separate occasions, for which I had made appointments. The 'help' that they offered consisted of a lady who literally recited the 'self assessment' guidelines that they issue - she would not even look at my records as she said that, that could be seen as 'bias'. On one occasion, after they had obtained a ccj, the 'gentleman' and I use the term very loosely, 'listened' to my explanation, seemingly patiently, for over an hour - left me in the office for five minutes and came back with a shaven headed individual, whose tattoos and ear piercings would have been more at home in a bare-knuckle boxing tournament, and introduced me to their in-house 'bailiff'. He, then shouted at me that I must produce the completed assessments within seven days, otherwise his 'Freddy Krueger lookalike' coleague would e 'paying me a visit' - Some Help!! :mad:
As it happened, I WAS visited by one of their in-house collectors, but he turned out to be a very mild-mannered 'civil servant'. Again he would not look at my records, but he did concur that I did not 'have the trappings of omeone who had earned enough to owe HMRC £83k in unpaid taxes, and said he would report his findings/observations to his line manager.
It was approximately three weeks later that one of HMRC's army of employees visited my house and 'served' me with a Statutory Demand.
Like you, I also had been 'managing my debts' and HMRC were by far my largest 'creditor' - my other 'debts' being no more than £12k.
After being served with the Statutory Demand, I did take further advice, in my case from the local CAB - the adviser was quite helpful although he did tell me that mine was the first 'creditor petitioned' bankruptcy that he had dealt with and he needed to take advice from a more experienced colleague. That advice was, basically, that once HMRC had started on the bankruptcy trail then there was little, short of 'paying what they were asking and attempting to clam it back later', to actually stop this process.
As this was, quite simply, NOT an option for me, I duly turned up at the 'Royal Courts of Justice' on the 26th of October, as summoned, and was declared bankrupt at 10.34 am on that unseasonally pleasant Autumn morning.
So, for what it is worth, my opinion is that there is very little that you can do to 'stop' HMRC from carrying through their bankruptcy threats - they will, doubtless, as they offered me, offer you a six week 'stay of execution' on the day of your hearing, in order to get the accounts in, but unless this is an option for you, then, not only would you be unnecessarily prolonging the inevitable, but they will continue to apply interest, penalties and charges, making the amount claimed appear even more ridiculous.
Unless, therefore, there is a genuine way that you can come up with the accounts that would be acceptable to HMRC - and, perhaps, Business Debtline can advise a solution - then, if I were in your shoes, I would stop paying my other creditors and use the mony to petition for my own bankruptcy rather than wait for HMRC to 'do the deed'.

Edit: Business Debtline phone number is 0800 197 6026 www.bdl.org.uk

fiveyearplan

Once again Rog2, very eloquently put!