The taxman

debtfreewannabe_5

Hi all,

As a lurker on this forum, I thought I'd finally decide to post.

I'm self-employed and behind on my tax payments. My self-assessment tax was due in Jan 08, with another lot due in July 08. I've almost cleared the Jan one and have a payment plan in place, which I believe I will be able to meet, to clear July 08's by the end of the year.

My corporation tax was due in Mar 08. I have paid all but £2000 of this which is due next month. I will be able to make this payment, but will have to forgo paying other bills to do it.

I am using the money that I should be putting towards next years payment to pay this years payments, so I will have difficulty next year. I think I'll be able to meet next Jan's self assessment payment but won't have enough to pay next Mar's corporation tax payment.

The one silver lining is that my income will increase from end of November and give me a surplus of about £1000 month. But I won't be able to save enough to cover my corporation tax bill (likely to be about £13000) for March.

My question is: how patient is the taxman likely to be? My situation from end of Nov means I know I can get out of this situation, but not in time for March. My previous year's payments were late also (though not as much) so I fear they may be less patient next year, particularly as I asked to pay the Corp Tax at £1k a month for the next 4 months, but they refused and insisted I pay £2k a month (1 of which I've now paid) for the next 2 months.

One option that occurred to me was to request a payment holiday from my mortgage lender for say 3 months. As the payment is quite high that would make a big difference. However, the mortgage is fairly recent (10 months) and interest only. Is that still an option?

smashedbooboo

Hi and welcome to MSE, i am sorry i am unable to answer your question hun, but am bumping this back to first page in the hope someone maybe able to help you.

Good luck hun

Boo x x

Simon_M_2

debtfreewannabe wrote: »

Hi all,

As a lurker on this forum, I thought I'd finally decide to post.

I'm self-employed and behind on my tax payments. My self-assessment tax was due in Jan 08, with another lot due in July 08. I've almost cleared the Jan one and have a payment plan in place, which I believe I will be able to meet, to clear July 08's by the end of the year.

My corporation tax was due in Mar 08. I have paid all but £2000 of this which is due next month. I will be able to make this payment, but will have to forgo paying other bills to do it.

I am using the money that I should be putting towards next years payment to pay this years payments, so I will have difficulty next year. I think I'll be able to meet next Jan's self assessment payment but won't have enough to pay next Mar's corporation tax payment.

The one silver lining is that my income will increase from end of November and give me a surplus of about £1000 month. But I won't be able to save enough to cover my corporation tax bill (likely to be about £13000) for March.

My question is: how patient is the taxman likely to be? My situation from end of Nov means I know I can get out of this situation, but not in time for March. My previous year's payments were late also (though not as much) so I fear they may be less patient next year, particularly as I asked to pay the Corp Tax at £1k a month for the next 4 months, but they refused and insisted I pay £2k a month (1 of which I've now paid) for the next 2 months.

One option that occurred to me was to request a payment holiday from my mortgage lender for say 3 months. As the payment is quite high that would make a big difference. However, the mortgage is fairly recent (10 months) and interest only. Is that still an option?

Hi, can you clarify a few points please.

You say you are self employed, corporation tax is for limited companies therefore you are an employee of the company not self employed.

A quick calculation based on your assumption the corporation tax bill will be £13k next year means you will have made a taxable profit of nearly £60k, so I am unable to see whay you are finding it difficult pay the tax? This is based on corporation tax at 21% as your profit must be less than £300000

It sounds to me as though you don't have an accountant, if you do, get another one as a good accountant is worth their weight in gold.

To answer your question re the taxman, when I recently closed my business I was told to ensure that I had enough to pay any tax due, as the taxman is classed as a priority debt. They can seize any property or assests you have very quickly, and unlike normal debts you can be imprisoned if you don't pay. They have been good enough to give you sometime to pay for now but I doubt they will be so understanding next time. The taxman sees it that your tax is due when it is due, and if you haven't got it then you must have spent it and I'm afraid it is not yours to spend.

I don't mean the above to sound harsh but with a £60k taxable profit something doesn't add up

Cheers,

Simon

smashedbooboo

And someone else who cant sleep. Thank you for the reply to the poster Simon

Boo xxxx

Simon_M_2

smashedbooboo wrote: »

And someone else who cant sleep. Thank you for the reply to the poster Simon

Boo xxxx

:rotfl:Working 3 - 11 at the mo so this is my evening lol

smashedbooboo

Eeeeeeeeeeeekkkk get yourself over to the night owls thread then Simon. Chuffin hell thats an odd time table hun. I thought mine was bad as an agency nurse. But never heard of a 3-11 before. Are you inuniform by any chance. Oops that sounded a bit erm erm . Oh keep your mouth shut Boo before you get yourself into trouble. Sorry Debtfree. Did not mean to hijack your thread hun xxxxxxxxxxxxxxx

Bismarck

can I suggest you post this on the Small Biz forum as there are some experts on there as well who could help - simon_M has made some good points though. with profits like those you should be able to pay the taxes due and accountants fees and you could well find that they save you money in the long run - and have a good relationship with the taxman.

sammy115

Changes in legislation mean that the revenue are no longer classed as a priority debt they go into the pot along with anyone else. HOWEVER, it is very important that you communicate with the revenue in regard to your situation. You have to take a long time view on this problem, you have obviously got behind and are now chasing your tail to catch up. There are things you can do...