Cannot pay the tax man but they won't help - what do we do?

x12yhp

We have a small problem which is entirely of our own making. Basically, as a result of being self employed, we did not pay our tax for several years and now we are in a mess. I know that we are the ones to blame and we are willing to work it through but we have the tax man bashing on the door and threatening legal action if we do not pay immediately - which we cannot do. We have taken a second mortgage to try and deal with it but we are not there. We have tried talking to the tax people but they are telling us that it is tough and we just have to pay.

So please help - what can we do?

Many thanks

Charco_2

Do you have other debts?

Foxy-Stoat_3

Not paying tax is a criminal offense, it isnt like not paying a loan where you get charged, nasty letters and CCJ's.

If you have no other way of raising the money, selling stuff or cars for cheaper ones or moving into smaller house, your best bet is to seek advice from CAB as quick as you can.

Would the tax man not allow you to pay the outstanding tax thoroughout the next 12 months?

x12yhp

Sorry guys, it is not actually me. It is someone I know reasonably well.

I am unaware of any other debts. The initial problem (years of not paying) has apparently been sorted via a remortgage of the house. The difficulty is that this means that almost every penny is going to servicing this and leaves nothing to be saved and put aside towards the next year.

Repaying over the next 12 months seems like an option but it just delays the inevitable, I guess. In 12 months they will want another slice which wont be there because it has been all spent paying last year off...

I am, personally, not a fan of this situation and would normally say bad things about it. I didnt think I would ever find myself saying that I want a way of bailing someone out for spending too much...

Foxy-Stoat_3

They probably have held some information back, like other debts etc, so I wouldnt be bailing ANYONE out of anything.

Bottom line, dont pay tax - you go to jail, dont pay the mortgage - you go bankrupt.

Thats how understand it but am not a tax expert or financial advisor.

x12yhp

Yeah but surely there is more to it.... if he goes bankrupt, the taxman gets nothing. I see all these tv adverts which claim to be able to help with this sort of thing.

The problem is that if he saves enough to pay the tax man, the mortgage people come after him... he is happy to pay the tax bill but he simply doesnt sound like he has the money to do it at present. My head is pickled on it too.... people should be careful and not get into the position.

JCS1

HMRC will make people bankrupt for non-payment of tax eventually, regardless of whether they have any assets or not (suspect they do it as a way of closing their file).

dancingfairy

Your friend needs to get proper advice - a) regarding his business try National Businessline and b) regarding his debts - try National Debtline, CCCS or his/her local CAB.
df