Unpaid (as yet) tax = outstanding debts for mortgage?

smallpurplepill

Hi all

Thanks for the advice I received previously, I am slowly getting things sorted out and hopefully 2011 will be the year of finally buying!

I came up against a problem with "outstanding debts" though. From my point of view I don't have specific debts, just credit cards which I pay off fully every month for groceries etc. But working through the forms it occurred to me I have quite a complicated tax situation in that I will owe a fair amount to the Revenue for last tax year (I am doing the return at the moment) in relation to investments. From salary I have paid the normal income tax via PAYE but this doesn't take account of investments.

Without going into too much complication - I don't know how much I will owe as I have had to 'estimate' the figures due to not being able to get real figures and did the calculation on this basis. The Revenue have a procedure for confirmation of an estimate which ideally you need to get before doing the return (so they can check it is ok) but despite me sending this off last summer I still haven't heard back from them despite repeated chasing !!! so now I have no choice but to submit an 'estimate' which I know they will have to audit and I'll have to re-do, as I haven't had any official confirmation at all. (It isn't possible to obtain the real figures so I have to get them to accept the estimate at some point!)

I have the money in savings to pay what I owe but the issue I think is I have an 'unknown' tax liability at the moment, in that they could come back to me at some point and say my estimate was not acceptable and I should actually have paid X (obviously I am willing to pay whatever I need to!!!)

From asking around it seems like as I have money to pay and potentially more to pay when they finally come back with a response, that I am actually 'in debt' to the tune of this. (It's not a default or CCJ or anything, just money I will owe in the course of the tax return, and potentially have a request for more. It's not that I've failed to pay if you see what I mean)

With the red tape and bureaucracy it can probably take months if not years to sort out though!! (All this tax return business is new to me as I'm not a company director / higher rate taxpayer / etc so this is the first year I've had to do it!)

So my question I think is.... am I effectively blocked from applying for a mortgage now until this tax situation is resolved - as I'm not sure it is quite honest to say I have 'no debts' but cannot state how much I will owe either, as I don't know!!

Any help appreciated, I am just worn down with this as it's been going on for years now and I am getting nowhere!!! One problem after another :eek:

Jenniefour

Assuming the possible amount owed to the Rev is significant - thousands rather than hundreds then it sounds like you need to get an acountant to sort this out, seriously. I've never known the Rev take ages i.e. more than a few weeks - unless it really had dropped through the net somewhere. if you don't want to do this I would be seriously chasing them in writing to get this tax situation sorted as soon as possible. It is not in your interests to let it drag on - not least because there is interest charged for late payments. So all the while this situation is still open the final bill is mounting. When you have the tax situation resolved then you will have some certainty about your finances for the future.

Definitely sort out the tax situation before getting into the property buying process. Whether the outstanding, as yet unknown, tax liability is technically a debt or not is irrelevant in your case as it stands - it is still an amount of money that needs to be paid because it may affect how much deposit and so on you have for a property purchase.

smallpurplepill

Yeah, it's all been a bit of a nightmare and I can't believe I have now been worrying about this for a year but it's true!! A few months of trying to find 'exact' figures (and failing) followed by a few months of trying to get sensible advice from the Revenue and finally waiting for a response. I'll be relieved when it's over (whenever that is) but the guy at the revenue when I phoned to chase it again the other day 'helpfully' informed me "it won't just go away you know, you have to find out the figures" pretty much.

Now I think about it again today I think you're right, no way I can push on with a house until this is sorted!! It's in the couple of thousand sort of amount and I can't think that their decision will be too far off the estimate but somehow don't think they will just take my word for it :mad:

(I'm not a big believer in 'fate' etc but it really seems like someone upstairs doesn't want me to have a house!!! )