Major Tax Problems - Help Needed

scott808

Hi guys,

To cut a very long story short, i have to get my life sorted out and some suggested you are really helpful and might be able to point me in the right diection...

From 2002 onwards i have worked doing freelance sales in some capacity for the same company on and off. The first 2 years i earned about £80k per pear, the next 2 about half that and since then its been a lot less, some years, like last year, a couple of grand.

I know its extremely stupid, but i have never paid tax or NI during this time and its really affecting my life in a big way. I did set myself up as self employed in 2003, never did anything else. Ive only just in the last few months started to get statements from the Inland Revenue asking for money which they have estimated. My friend owns the company i freelance for and its obviously going to be a bit awkward when it all comes out as you can imagine.

Ive got no money, no job as such, dont own a house, but at the same time i need to really sort this out as i cant get on in life any more and im really scared!

On top of this, my girlfriend recently lost her job as well and would be entitled to income support and help with our rent but they need to know my job and earnings details and now thats made it a lot worse. I also owe a bit of money to odd companies here and there - not a huge amout, probably about 5k in total.

Please help me out or at least tell me what i can do -im scared and have been putting this all off for years. Is bancruptcy an option? I wish i could just wipe everything out and start again

Thanks so much in advance

Marthasdad

Hi Scott and welcome!

Well done for facing up to the issue as well.

I'm not an expert by any means, but I do know that Inland Revenue will be treated as a "priority" debt - like mortgage, council tax and court fines.

You really need to post on here what your situation is - how much the revenue say you owe, what are your living circumstances, do you earn any money etc.?

In my view, you will also need to communicate with HMRC about this asap, as they won't go away, but you may well be able to negotiate the figure and agree some sort of payment plan with them.

I'm sure someone with more knowledge on these things than me will be along shortly.

Well done again for taking the first step!

40somethingmum

Hi

I agree with Marthasdad. Get in touch with HMRC asap. If you were earning in the region of £80k for couple of years then your tax bills will be very high I am afraid.


Don't know much about bankruptcy but if you don't or can't pay this may
be the route that HMRC will take.

Good Luck

40SM
ETA Do you have an accountant who can work out how much tax is due? If not I think it would be a good idea to get one.

scott808

Hey, thanks for getting back to me

My current situation is this - i dont have a job as such - i work freelance in sales as stated above, but also earn extra cash DJing and doing some other bits as well. I rent a house with my girlfriend which costs us £850 per month in rent and my only other outgoing money i pay regularly is for my phone. Im helping out my girlfriend and my Dad setting up their new businesses, which at the moment isnt bringing in much money at all, and in October i am going to do teacher training for a year.

I think slightly overetimating things i will have made around £200k i havent paid tax on in total.

Thats about it really. Im just so scared about what might happen to me when i come clean with HMRC. I know they arent going to go away, but there must be some things i can get in place and proceedures which i can follow which might help me in the long run.

I also obviously want to get the other situaltion of my girlfriends application for income support/help with rent and council tax sorted out as ithey have asked for my details too and she cant do anything wthout them. Pretty screwed really.

Tixy

Hi Scott

From the info you have posted you are going to owe a lot of tax (at a very quick guess you are going to be looking at over £100k tax plus fines). I would definatley deal with this as soon as you can. Personally I would speak to an accountant first, if you don't have an accountant perhaps ask your friend who you worked for who they use.
Have you kept proper records and all the paperwork of all your income & business costs since 2002?

Wll done for posting, don't hide from this anymore, take action to rectify it. Bankruptcy may be an option for you or could be forced on you by HMRC. Do you own a house? Do you have equity in the house? I assume you have no savings and that you have spent all your income? What did you spend it all on and do you have any assets you can realise to put towards your debts?

40somethingmum

scott808 wrote: »

Hey, thanks for getting back to me

Thats about it really. Im just so scared about what might happen to me when i come clean with HMRC. I know they arent going to go away, but there must be some things i can get in place and proceedures which i can follow which might help me in the long run.

.

I really feel for you. I can understand that you are scared of contacting the HMRC but I bet you are living scared every day due to the uncertainty. With a bit of luck you will be able to arrange a payment plan with them YOU will need to provide them with incomings & outgoings before they will agree to this .

As a matter of interest- how much tax are they estimating?


40SM

dancingfairy

I would complete your SOA and post it up on here. There's a link for it in the post for new people.
That way people can see exactly what the situation is.
By my rough, very rough reckoning you owe about 60K - is that correct?
You really need to do a thorough SOA so we can see how much money is coming in and going out.
The options I can see are declare your incomings and outgoings therefore getting benefit you are entitled to and get in contact with the inland revenue to arrange some sort of payment plan
or don't apply for the benefits and save every spare penny you can for the inland revenue.
What's your income like at the moment? how much do you owe to HMRC? and can you negotitate with them? if you can't get the money and can't pay by arrangement then I would have thought bankruptcy will be a possibility.
Have you contacted National Debtline or CCCS or your local CAB for advice?
df

Tixy

My last post crossed with yours, Your bill may be slightly slower. I think you need the advice of an accountant, which although will cost you could save you a lot in tax.

If you are helping others set up new businesses make sure that they register as self employed and put away 1/3 of their income into a savings account to pay their tax bills. Also advise them to get accountants early on to ensure they don't get in the same mess as you. (They may be okay to use a very cheap small accountant, personally I would advise you to go to a slightly larger firm who have more tax experts and more experiance of cases like yours).

What HMRC have estimated you owe is irrelevant now, you need to know how much you actually owe.

scott808

Thanks again for all your advice and help. The problem i have is that i only seem to have my invoices from 2005 onwards, and not 2003 and 2004 which were the 2 years i earned the majority of the money. I was careful to keep all my invoices but for some reason they dont seem to be on my hardrive any more

As for my help setting up other businesses - its purely on the operational side of things, not anything to do with accounts!!!

Tixy

Was all your work was for your friends company back in 2002-2004? If so they may be able to let you have copies of the invoices again, or at least a list of the amounts he paid you. He should keep records for at least 6 years (as should you for future reference) so should still have these somewhere. Alternatively if you have bank statements or copy bank statements then an accountant will help your work from these to produce figures.

You probably should have been VAT registered as well so may have some VAT to pay in addition to the income tax & NI.