3 years tax arrears

dankerrysmum

hello everyone
oh went self employed 3 years ago and avoided the tax man until this year now he has to pay approx £9k for the last 3 years ,which we just dont have
but we are willing to pay what we can afford which would be approx £100 per month at most ,do you think they would accept this ? or would they take us to court ,make us bankcrupt etc ,we have a mortgage and a car ,but oh needs it for work
many thanx

BoGoF

To be honest £100 a month will barely cover the interest that will be due on the late tax. They make accept it in the short term given the recent Government announcement to allow time to pay but sooner or later you will have to make inroads into the debt and the only way of doing so is to make larger payments. HMRC argument for a self employed person saying they can't afford is that you should have made provision for your tax bill.

HMRC can and do make people bankrupt but only as a last resort.

anniecave

your OH needs to work out each week/month what he should be paying in tax and put this aside (or pay it over). Your OH should be paying that as a minimum to start off with as that's just ongoing. If your OH can't afford to pay the tax generally then outgoings/income is not being prioritised correctly. Income tax should always come first!

moneypooh

They may be more relaxed because of the current situation but because there are 3 years missing they might not. When my friend couldn't pay a few hundred pounds last year they weren't helpful. Fortunately I let him borrow it from me and then he paid me back.
Fingers crossed for you, but they will see that you have had the money and didn't put it aside

Mikeyorks

dankerrysmum wrote: »

but we are willing to pay what we can afford which would be approx £100 per month at most ,do you think they would accept this

No. The Govt has told them to bend over backwards to help people in the current climate. But it hasn't told them to be stupid. So as your tax arrears are accruing at the rate of £250/month ...... they're not going to accept £100 and encourage you further into arrears?

I'm sure there's more to this than meets the eye .... so possibly getting Returns etc in would be a first sensible step? If this is a determination HMRC has made (ie your OH hasn't filed Returns) ... even less chance they will accept payment of instalments?

Stuart_Bellamy

I agree with Mikeyorks. Although the Revenue have been told to be help those that owe tax they can't afford to pay £100 p.m would be too low.

As he also mentioned has your oh actually completed the tax returns for these three years. If it is a determination ie an estimate or the Revenue has prepared returns on his behalf I would recommend that you see an accountant asap to see if the assessment is correct.

The only problem here is that the accountant will charge you fees but it might help in the long run.

They would also be able to help with arranging payment terms with the Revenue once the liability has been checked.

lemma1968

Speak to their debt management department.

I have had issues over the years. Budgeting has never been my strong point and I frequently got behind in my tax although I always sent in my tax returns in time so they knew exactly how much I owed them.

I was sued 3 times in the early 2000's - always managed to negotiate a repayment schedule but still could not avoid the CCJs.

Then in 2004/05 I paid what my accountant had calculated I owed. I was going to stop work so final accounts were prepared and I was told I would have a balancing payment liability of c. 2-3K in 2006.

WRONG! It was £16K and I could not pay it back.

I stared earning again, accruing more tax as i went along and last April they sued me again (I was paying back about £1000pcm). I have now paid that and the 2 payments on account in Jan 08 and July 08 (only just) and I am due to start the treadmill again in 3 weeks....can't pay it.

I am hoping they will hold off suing this time in light of the current market ad the fact I cannot borrow due to the CCJ.

You MUST talk to them, do not stick your head in the sand. Get an accountant to do your return (my new one only charges me £295pa). Find out exactly what you owe - then negotiate AND STICK to the repayments. If going out has to go, then so be it.

We don't do holidays, evenings out or anything now. Sacrifices had to made cos the interest on what I owed was staggering.

Good Luck with it.