Decided BR is the only way

liquidbutindebt

Hi Folks,

I've finally decided that I am not able to resolve my "differences" with HMRC exept by declaring BR. My situation is somewhat complex. I first took professional advice in Feb 2009 which resulted in an attempted IVA. This HMRC finally rejected in around June. Since then I've had my head in the sand really - and spent approx. 4 months out of work. But I will probably pop into Croydon on Friday morning with my BR fee and the forms filled out...

I am self-employed, after a fashion. I am currently working in the Netherlands and paying Dutch tax as a Dutch employee. I am due approx. 2 months salary because I delayed registering with the Dutch tax authorities and couldn't be pay rolled. Not on purpose, just because work has been manic and just haven't had the time to do it. I will likely get paid after BR. How will the OR deal with this?

Also, because I am working in Netherlands my travel expenses are quite high. My contract pays for most travel (hotels/flights, etc) but doesn't pay for food/taxi/public transport, etc. I spend approx. £400 a month on taxis to and from the airport (my flights are usually before public transport starts working and/or the commute times are ridiculous) and another £500 or so on food while abroad. My mobile phone bill and 3G bill are also significant (again, necessary for work), approx. £400 a month. How will the OR view these expenses? They are high but necessary. I could not carry out my work without incurring them. Will they be allowed in my SOA?

I get paid according to the days I work. If I don't work, I don't get paid. On average, including time off for holidays, sickness, bank holidays, etc. I reckon I work 15/16 days a month. Will the OR recognise this as the nature of my employment and calculate IPA fairly on that basis? Or will the OR take IPA payments, say, half yearly based on actual days worked? How does that work?

Finally, I earn a fairly significant amount. I understand that post BR it takes a 2 - 3 months to set up IPA. I also understand that money earned in that period is usually of no interest to OR. However, because it is likely to be a significant amount (c. £10k) will the OR take it? Or can I use this as a buffer?

Thanks,

LBID

liquidbutindebt

It would be far more costly to own a car thanks to airport car parking charges. Also, they are personal expenses as I have no business vehicle through which to claim them. The nature of my Dutch employment contract means I can't claim expenses.

debtinfo

Hi Liquid, You have an unusual situation and so no one here can really say what the OR will allow or not. The figures that are used are guidlines only for this very reason, to be at the OR's discretion for unusual situations like your self.

The Overiding principle that the OR sticks to is that if you can prove that the expenses are necessary for your employment and that their is not reasonable alternative then the OR will allow them. Be prepared though that the onus will be on you to prove why you are different from the average. But all in all the OR wants you to work so that you can contribute ans will not cut you back t the point where you cannot work

liquidbutindebt

Thanks Debtinfo, I thought that would be the case re: expenses. I'm asking as I have little faith in officialdom thanks to my ridiculous experience with HMRC

Obviously I have mobile bills, that's not an issue. Taxi fares are fixed price anyway so proving that is easy (I don't tend to get receipts because I can't claim them). I can certainly start keeping food receipts to show OR.

I do realise my situation is a little more complex than normal, especially as I have a lot of worldwide travel coming up with work and it's always difficult to predict expenses in situations like that.

debtinfo

Yeah, its a good idea to start collecting as much info as possible about your expenses and your working patterns. It is likely that that when the OR first sees it they will have no idea about how your employment works, so you will need to be more pro active than the average person in proving your case

liquidbutindebt

I will certainly do that! Actually I think I'll keep an expenses diary, with supporting receipts where possible.

Do you have any idea on the other questions... the delayed salary payment and also normal salary between BR and IPA?

nervousmother

Liquid, I do know if you have a large amount of money in a uk bank account the OR can take it. last Jan my OH earnt 6k in that month, but we were allowed to keep it as he did not earn much in feb/march and we could show the work pattern.
You will probably know you need to open a BR friendly account, The co-op and barclays offer accounts to bankrupts, however i have heard reports of barclays freezing money and sending it to the OR.

You earn a fair sized wage, if you have large expenses that are prooven they will be allowed.
Have you contacted any debt charaties to see if there is another way out of this?

debtinfo

At the date of the bankruptcy order the OR will look at what money you have and will take what they do not think is needed for your normal living expenses.

It is possible for them to take a build up in savings during the bankruptcy via what they call an "after aquired asset". This is very rarely done so i cannot say what the chances are of it happening, just that their is a process available for the OR

debtinfo

How much do yu owe the tax man and how long do you think it would take you to pay off

liquidbutindebt

Do to some very poor business decisions that are entirely my fault I owe Hector in the region of £60k (he thinks it's more, but between me and the OR we will settle on the right figure). I have tried every which way to get Hector to let me pay via another means but, alas, it's not working. My history is on here somewhere, but I proposed an IVA which would return 100% in under 3 years to all creditors, but Hector rejected it As a result of Hector's inflexibility, now all my creditors will be faced with my bankruptcy. A needless complication. I find life is increasingly like that in the UK

piptom&AndyPandy

If going to go bankruptcy HMRC are quite good at making individuals who owe them BR save your pennies and they'll pay for it.

PAP