Advice for illegitimate HMRC VAT Debt Collection UK

Swim_2

Hi

I was hoping someone here can give me some advice on a debt I have with HM customs and revenue. I looked at the stickies but it doesnt seem to help and im fairly uneducated in leagal issues and therefore vulnerable to extortion.
Let me explain..

A few years ago when I was in college I decided to try my hand at online multi level marketing, stupid idea. However I needed to register for vat with a business name to access some features of purchasing websites and setting up my paypal account to my website to buy products and services id invested in.

After no success whatsoever and learning that mlm's are a great big scam where people are tricked into buying a service where they have to trick others into buying it for a share while those on top get rich. I decided that its complete deception and finished / closed all my accounts with all websites and services.

I did not make one single sale to tax but at the time I was unaware how to Unregister my business from vat and going through alot of difficult family issues and work. I pretty much just left it as it was.

I didnt receive some of my mail for a while but then i started getting these HMRC official letters saying I owed them for months of VAT and for not filling tax return forms.

So eventually thier numbers build up to ridiculous amounts and they make surcharges for the debt in new letters every month for taxation.

I didnt think much of it at the time as I was negligent and pre occupied plus under the idea that its illegitimate money I don't legally have to pay.

Today I have a new letter from a company know as Advantis for thier client HM Revenue and customs wanting £139 which is for 4 months of surcharges at £34 a month.

I would have no contact with them but because its the government taxation office its a big deal here. On thier letter they say "You can confirm our authority to act by visiting the HMRC website hmrc.gov.uk/payinghmrc/debtcollectors

This is getting ridiculous so I called them up and they informed me that I had to pay immediately (deju vu) and that the balance could double and I could be taken to court for not responding.
I told them my situation about what happened and my living condition that ive been very ill with a blood problem and on basic living allowance from social security and strong anti inflammatories for almost 1 year now with bank statements that show no online income.

They said I have to first pay this debt as fast as I can then contact them about it and It may be appealed and that I could not contact them directly.

Im really not sure what to do now, I asked the lady on the phone who was itchy to get me to pay some or all of it to call me back tomorrow.

This whole thing seems really unfair but Its my fault for not contacting them sooner. I'm unsure of the best course of action just now. I was told the law of the Land protects us from unfair interest, charges and fines and its my paper me that's really fined who if I appear in court I choose to represent.

I don't have spare money to throw around to get monkey's off my back. Its hard living..

Should I tell them no or use all my money to pay them?

Thanks for your time

SusieT

VAT debt is not illegitimate it is one of the most serious debts you can have.
If you want to try and get it reduced you could talk to HMCE but since you did not even try to contact them its unlikely they will do much. You don't say if you were trading as a Ltd company but from your comment about the "paper me" I suspect not.
Talk to them and explain, they cannot do anything if they don't know whats happened, you will also be able to ask them about deregistering at the same time. If they cannot reduce it you will have to make an arrangement to pay it.

JasonLVC

Ignoring all of the errors you have made, this situation should be able to be resolved.

When registered for VAT, you are supposed to submit VAT returns declaring your sales. When you fail to submit a VAT return, HMRC will estimate an amount and issue you with a yellow letter called a Surcharge Liability Notice (SLN). That estimated amount will then also clock up interest.

You can cancel the SLN by submitting your VAT return and HMRC will then cancel the SLN and recalculate the interest on the correct figure you have supplied on the VAT return. If you therefore submit a Nil VAT return, there will be no VAT to pay and no interest charges and no penalties.

You say you registered for VAT "a few years ago", I'm suprised you managed to ignore HMRC letters for a few years and only now take an interest but it is HMRC policy to refer "small debts" to a debt collection agency and Advantis are an authorised agent for HMRC. HMRC use these agencies to tackle those who ignore all correspondance and it usually spurs people into action, as is the case here.

The debt collector will not have your file and will not be able to enter into discussions with you as to whether the VAT is due or not. You need to go back to HMRC and explain it to them, preferably in writing by asking them how many VAT returns are outstanding and then submitting them to HMRC. If, as you say you made no sales, then they will all be Nil VAT returns and the problem will go away, although HMRC may likely come and visit you to confirm this is the case - that is, they will want to see copies of your bank account going back a few years to ensure that what you say about not making any sales is true.

That, I suspect may be an issue for you as you may have all sorts of income coming into your personal bank account which may or may not be clear (ie, ebay/carboot sales, etc).

The alternative is not to pay up of course, but then that may affect your credit rating and will certainly prvent ou from registering for VAT in the future should you set up a new venture.