Need some advice for my son please

mardatha

Apologies if this is the wrong forum, I not sure where to put this.
One of my sons is self-employed and in a mess. He isn't behind yet on any payments but has a big tax bill coming soon. He asked me to find out on here what happens if he can't pay it - he has been very late paying tax bills for the last few years and says they won't be willing to give him any leeway.
What should he do or not do - and he wants to know if he can lose the house even if he is paying the mortgage? He hasn't missed any payments.
I can't help him because I've never bought a house or run a business. TY in advance

sistafromanothermista

Has he spoken to the Inland revenue/HMRC yet?
I would say that's his first port of call to see what they offer.

thatsean

As sista says - he has to speak to them.

He also HAS to look at his business cashflow. He is spending money that isn't his throughout the year, and then panicking - a luxury that PAYE emplyees don't get. He should be taking a cut of his profit into a separate account monthly to avoid this. If he can't afford to do this, he needs to look at his figures.

sistafromanothermista

Very good advice thatsean. Really he should be putting some aside throughout the year to prevent getting this big bill in the future.

mardatha

Ok yes that's what I said - but the question I can't answer is - will he lose the house if he can't pay his tax bill? Or is that a separate entity?

DevCoder

http://www.hmrc.gov.uk/factsheets/ef1.pdf Is the first level HMRC will apply, distraint

http://www.hmrc.gov.uk/factsheets/ef2.pdf then it goes to magistrates court, a charge can be placed on your property at this point

http://www.hmrc.gov.uk/factsheets/ef3.pdf Then it's county court for a CCJ, more likely to apply a charge on the property at this point

http://www.hmrc.gov.uk/factsheets/ef5.pdf Eventually they could seek bankruptcy which would put the house at risk

sistafromanothermista

It does look like a possibility according to the above post.
He really needs to call them and speak to them about this. Burying his head in the sand with them is a no no. Hope he gets it sorted..

mardatha

Is this Scottish law? and thanks xx

sleepless_saver

mardatha wrote: »

Is this Scottish law? and thanks xx

There will be slight differences in court procedure e.g. there are no county courts in Scotland, but the way HMRC go about it will be basically the same north or south of the border. Tax law is UK law.

mardatha

Thankyou, I did wonder because I haven't heard of county courts. Many thanks everybody and I have passed the links onto him

Lensman_2

He should also talk to Business Debtline.
http://www.bdl.org.uk/content.asp?cid=66

I suspect they will tell him that tax is a priority debt.