Please help distressed-middle-aged-lady with old (unknown) business debt….

AlwaysStruggling

I seem to get myself into some scrapes! I hope someone can offer some advice because I’m really stuck and struggling not to cry right now.

I started a small online business with a mate 5 years ago (we were 50/50 partners) – it never took off and closed after a year or 2. It left me in a lot of debt (which I’ve nearly cleared – hard lessons learned etc.).

2 days ago I got a letter out of the blue (addressed to me personally) from HMRC saying there was £6k of unpaid PAYE contributions, and I must pay immediately or they would ‘take steps’ to enforce collection.

This is the first I heard of this, my mate (business partner) was the sole cheque signatory and handled all these payments – I thought everything had been paid at the time and that when the business closed there was no debt whatsoever.

I called HMRC immediately and they were really aggressive, I then spoke to my mate/ex-business-partner who shrugged it off saying it must be a mistake.

So if this turns out NOT to be a mistake I will be really angry but it obviously must be paid – the problem is; my mate is totally skint (I’m not much better). I could probably raise enough to pay half but I’m not sure my mate can.

I am worried that HMRC have ONLY contacted me and not my ex-business partner. I am worried that – if push comes to shove and - if I offer to pay half, they will still chase me (and not my ex-partner) for the remainder (which I definitely cannot afford).

The thing is; I put up all the initial cash (and only worked part-time), I took very little out of the business, but my mate did work full-time at it and took a decent regular wage (as she had a young family etc.).

I don’t want to drop my mate in it, or fall out with her, but I cannot afford to (or think it is fair that I) deal with this myself!

When I phoned HMRC they mentioned court action and someone calling at my house, they said that if I didn’t pay immediately that this would affect my credit rating, which is really frightening me. I can’t understand this as I contacted them immediately when I got their letter – so I’m not trying to dodge anything!

My hubby and I have almost saved up a deposit for a house and this could set us back years – I already had to sell my old house to pay the old business debt and if I don’t get a new mortgage within the next couple of years then I don’t think I ever will! (I’ve not told my hubby yet as he’s soooo excited about getting our own house again).

If anyone has any experience of failed business partnerships or dealing with HMRC then please please give me your advice.

Thanks
Always Struggling
XX

newyearnewme_2

[/QUOTE]Good news is you can ignore this demand from HMRC outright. In this instance they have no powers of enforcement whatsoever and are merely using scare tactics.

As your partner suggested, it probably is a mistake anyway, but ignore either way and the whole episode should just blow over.

NJW (Goldman Sachs

Don't know how to quote but I think the above post is wrong, I was under the impression that HMRC don't have to go to court to take baliff action! from what I have seen in the press/forums HMRC should certaintly not be ignored[

kdenty

I think you probably need to get some professional advice. Did you have accountants that helped you organise your PAYE that you could ask?

AlwaysStruggling

newyearnewme wrote: »

Good news is you can ignore this demand from HMRC outright. In this instance they have no powers of enforcement whatsoever and are merely using scare tactics.

As your partner suggested, it probably is a mistake anyway, but ignore either way and the whole episode should just blow over.

NJW (Goldman Sachs

Don't know how to quote but I think the above post is wrong, I was under the impression that HMRC don't have to go to court to take baliff action! from what I have seen in the press/forums HMRC should certaintly not be ignored[

Thanks for taking the time to reply.

I am very uncomfortable ignoring HMRC in the hope that they will ‘go away’. I am not necessarily looking to ignore this anyway, I am more worried about the fact that they seem to be chasing ONLY me (when I didn’t even know that anything was (potentially) owed – having not been involved any payroll/financial admin in the first place).

Maybe it is a mistake – but I’m staring to have doubts about my ex-business-partner, she seems very laid back about the whole thing – but it is ME that is being chased and not her – and I don’t know why that is !

The thought of being on the wrong-side of HMRC, and them taking me to court for something that I new nothing of is just tearing me to bits!!

Sorry – off for another cry now !!

antrobus

Since HMRC are chasing you over "£6k of unpaid PAYE contributions" then I presume your business must have had some employees, and your "mate (business partner)" made a "mistake" in not paying across the PAYE to HMRC. Would that be correct?

The reason why HMRC is chasing you and not your former partner for this debt is because, as you put it your "mate is totally skint", whereas they believe they can get some money out of you, and as you were both partners in the business, then you are both equally liable for all the debts incurred by the business. In such circumstances a creditor will seek to collect from the one with the deepest pockets.

AlwaysStruggling

kdenty wrote: »

I think you probably need to get some professional advice. Did you have accountants that helped you organise your PAYE that you could ask?

Thanks, can I ask what kind of advice you think I should take?

For most of the time it was just the 2 of us in the business – we were both ‘self-employed’ (I submitted all my tax returns properly – so thought that was all absolutely fine).

For a short while when we were busy we did employ some other people, and my partner organised a freelance accountant to do the payroll for them etc.

The accountant would mail us the employee payslips along with the statement to go to HMRC every month, and my business partner (being the cheque signatory) used to pay the employees and post the cheque to HMRC.

HMRC are saying they have not got some of those payments that relate to these payslips. So yes I have gone back to the accountant via my business partner to ask for relevant documentation and information.

My business partner says she hasn’t got any copies of the financial records anymore – she closed the bank account down and says she no longer has any statements - I am still soooo worried because it seems to that HMRC are pursuing me personally when I don’t think I have done anything wrong.

thechippy

Have you informed hmrc that she dealt with such and not you?

You should be able to still get copy bank statements to see if the payments were made...

Whatever - the problem is 50/50 as was the company and your ex partner should be trying to help on this, rather then being dismissive.

Don't ignore hmrc, as they WILL enforce this one way or another, unless you can prove nothing is owed. The onus is on you to disprove it's owed, rather than them to prove it is.....:mad:

AlwaysStruggling

antrobus wrote: »

Since HMRC are chasing you over "£6k of unpaid PAYE contributions" then I presume your business must have had some employees, and your "mate (business partner)" made a "mistake" in not paying across the PAYE to HMRC. Would that be correct?

The reason why HMRC is chasing you and not your former partner for this debt is because, as you put it your "mate is totally skint", whereas they believe they can get some money out of you, and as you were both partners in the business, then you are both equally liable for all the debts incurred by the business. In such circumstances a creditor will seek to collect from the one with the deepest pockets.

Yes for a short time we had other employees, but to be blunt I took nothing from the business and my business partner did take a significant sum, and it was my partner that organised the employees and PAYE etc. I thought it had all been properly paid for!

If you mean I am being approached now simply because I happen to have more savings then surely that is not right? (this is a nightmare!)

AlwaysStruggling

thechippy wrote: »

Have you informed hmrc that she dealt with such and not you?

You should be able to still get copy bank statements to see if the payments were made...

Whatever - the problem is 50/50 as was the company and your ex partner should be trying to help on this, rather then being dismissive.

Don't ignore hmrc, as they WILL enforce this one way or another, unless you can prove nothing is owed. The onus is on you to disprove it's owed, rather than them to prove it is.....:mad:

No I haven't - I don't want to drop her 'in it', she's still a mate with a young family.

I'm not ignoring HMRC (I called them straight away as soon as I got their letter).

I'm ok (ish) with the problem being 50/50, but HMRC seem to be treating it as 100% me, which will simply ruin me

thechippy

I don't wish to be blunt, but she's dropping you in it.

You need to get copy bank statements for a start...

If she's a mate, then she'll help out on this, rather than being laid back and dismissive of the affair......

thechippy

Just to add, was the company Ltd??