Is money owed to hmrc included in bankruptcy?

Starry_Night

Hi Supa-Girl

My debt was run up from April last year until January this year, so it was debt incurred before BR. I was told on three different occasions by the BR helpline that it would be included in BR. Fingers crossed when I have my proper OR interview he/she will no a bit more. Good luck to you and your OH.

Starry_Night

Phew thanks for that NM

The OR said that the Inland Revenue might let it go, but would probably chase me for the money and it was up to me to sort it out. It was for a second job that I did doing some typing. The job ended in January 2009 so I would have guessed that from April 2008 until January 2009 was debt incurred before BR, therefore it being included in BR. Will I still have to do a self assessment in April 2009.

Sorry for hijacking your thread Supa-Girl

jenni75

Hi

We were both self employed and went BR on 2 April 08. Our Vat debt and tax debt was included in the br. We were sent self assessment forms shortly after at which point I went into melt down and ended up phoning a very nice gentleman in the tax office, I explained that our accounts were not completed for 07/08 as our year end was May 31st and we as bankrupts could not afford the accountant to finialise them, so we had to estimate our income for April 07 to the point we stopped trading. He said that was fine it was just so they could have a figure to put in for the Br. Also for tax credits I had to have a amount of income.

Each case is individual and we were just days away from the official new tax year, so it may be different as you have gone br earlier in the year. Although I understand that it will be a debt coming due after Br I would have assumed (I know never assume) the amount relative to the point of your br would be included. But you would be responsible for tax due from the date forwards.
It may be worth ringing your tax office and enquiring to their procedure on what is included, I found them very helpful and it will hopefully confirm either way.
Jenni

supa-girl

Starry_Night wrote: »

Phew thanks for that NM

The OR said that the Inland Revenue might let it go, but would probably chase me for the money and it was up to me to sort it out. It was for a second job that I did doing some typing. The job ended in January 2009 so I would have guessed that from April 2008 until January 2009 was debt incurred before BR, therefore it being included in BR. Will I still have to do a self assessment in April 2009.

Sorry for hijacking your thread Supa-Girl

That's ok. I hope you get it sorted and can include it after all. I've had my question answered so you feel free to hijack away LOL!

Good luck, hopefully you will get it written off

SG

sieve

Again sorry for hijacking this thread but this is how I see it working in my case.

Self Assessment owed 31st Jan 2009 for FY07/FY08 - £6000ish
First payment on account due 31st Jan 2009 for FY08/FY09 - £3000ish
Second payment on account due 31st Jul 2009 for FY08/FY09 - £3000ish
VAT owed 31st Jan 2009 - £5000ish

As I see it, I will be able to include everything but the second payment on account in the BR if I go BR in March 2009. So when I go BR, and I put forward my SOA, I *must* ensure I save £600ish in tax per month before giving the OR my figure for my income, as after all it is a figure after tax.

Does that sound sensible? Or will the second payment on account that's due July also be included since theoretically I have already incurred the tax as the FY is as good as over? Or would I have to move my BR date past 5th April if I wanted to do that?

Questions, questions!

Cheers in advance

S

jenni75

My understanding is that the July payments are made as a kind of advance for the figure owed for, so you make two payments by July 31st which should be your total owed, but someone will correct me if I am wrong. Sorry had to edit as got confused with the dates but yes it should fall in to your br.
Jenni

Simpsona

nervousmother wrote: »

ok guys, my hubby is self employed. on the day of his BR he had to shut down his business. This then gives the figure for what he has earnt and what he owes up till that point. a Tax return is done for that period and the tax is included in the BR. (this happened 6th jan) he opened up his business on 7th jan and any tax he owes from that date till april is not included in the BR.

So if your OR says its not inc.. argue!
The debt was made up during bankruptcy!

Nervousmother, did I read that right? Did they make your husband physicaly close his business down for calculation but then allow him to re-open it again and continue trading with a clean slate? Just I have a static business to and there is nothing of real value in it for them to seize and sell so I'm wondering what they will do with me? My appt is at 10.40am on day of BR, will they make me close it then or at the end of that day? All very confusing, I to owe HMRC so its good that this should be wiped, one sum is PAYE/NI for my one employee so hope that doesnt complicate things.

maxmycardagain

Is money owed to hmrc included in bankruptcy?

flipping hope so.......10,000 times over....

nervousmother

Simpsona wrote: »

Nervousmother, did I read that right? Did they make your husband physicaly close his business down for calculation but then allow him to re-open it again and continue trading with a clean slate? Just I have a static business to and there is nothing of real value in it for them to seize and sell so I'm wondering what they will do with me? My appt is at 10.40am on day of BR, will they make me close it then or at the end of that day? All very confusing, I to owe HMRC so its good that this should be wiped, one sum is PAYE/NI for my one employee so hope that doesnt complicate things.

Yes they did make him close it down. He had to sack his employee, only to open it up the next day for a clean slate. (getting a new paye for his employee) he had already paid that bill so didnt even owe them anything.
Anything owed to him before that date was now owed to the OR. He had no business debts at all, our BR is just down to Northern rock stuffing us up. His business has suffered during the recession however does still supply him with a wage of £1600 a month after tax
The OR showed interest in desks and computers as assets but OH informed them they would be worth £500 max for the lot the OR never said anything else about it. They then moved on to his client list saying it was an 'asset' we have pointed out that you cant make his clients go anywhere else. They are his clients as they like him.
He did not go back into work on the day of BR, if he had have done he would have opened up then. (we went for a pub lunch instead):o
There may be nothing to stop you opening up agian the following day if thats what you want to do, as long as you do not obtain credit. The hardest thing is living without a business bank account. Putting in masses of cheques into a personal account at the co op is a give away, they havn't said anything yet though!
We did ask the OR during the first telephone conversation at the court who told us about closing the business. He still has not had his 'proper' interview with the OR, that is this friday and we are both seeing the 'trustee' as a joint interview next wednesday :eek:
Good luck and let me know how you get on

Simpsona

Did he continue to use the same business name? I know you have to use the name you went BR under but what about your trading name/shop name? at this stage I dont know if I wanna go on trading but I would consider it if it was a fresh start with no debts. Business very slow so dont know how much longer the credit crunch will keep us down? Still new customers on a daily basis which is promising. We also have rent arrears with our business landlord, cant really see him allowing us to stay if that arrears is wiped off?!

Sorry Supagirl, have took your thread off on a bit of a tangent there! x