HMRC tax arrears within BR and allowable car valuation

thinkpositive1

JCS1 - so how about this as a scenario:

I sell my car, get £4k, set aside £700 for BR fees and use the £3.3K to buy a replacement car before submitting my BR petition.

Based on the £2k threshold, would the OR seriously expect me to then sell the £3.3K car I just bought to generate £1.3K for creditors leaving me with £2k to buy something else - knowing I had just traded down my car days before BR?

Would they really push for another sale to realise what would amount to a tiny amount of money compared to what creditors are due?

tigerfeet2006

It's a £1k threshold for cars so it would still be of interest to the OR.

JCS1

thinkpositive1 wrote: »

JCS1 - so how about this as a scenario:

I sell my car, get £4k, set aside £700 for BR fees and use the £3.3K to buy a replacement car before submitting my BR petition.

Based on the £2k threshold, would the OR seriously expect me to then sell the £3.3K car I just bought to generate £1.3K for creditors leaving me with £2k to buy something else - knowing I had just traded down my car days before BR?

Would they really push for another sale to realise what would amount to a tiny amount of money compared to what creditors are due?

Yes - because they have a duty to realise any assets (and OR fees get paid before any creditors - with a few exceptions such as employees).

woodformoretrees

Yes they would. The threshold is 1k.

philnicandevan

I've seen ORs argue about cars worth considerably less than the 1K threshold as well in the past...

longtermplanner

thinkpositive1 wrote: »

JCS1 - so how about this as a scenario:

I sell my car, get £4k,

this will be fine so long as you are selling to a third party. Don't sell it to a relative at what looks as though it might be a cheap price.

set aside £700 for BR fees

perfectly good use of the money

and use the £3.3K to buy a replacement car before submitting my BR petition.

Based on the £2k threshold, would the OR seriously expect me to then sell the £3.3K car I just bought to generate £1.3K for creditors leaving me with £2k to buy something else - knowing I had just traded down my car days before BR?

YES.

Buy a 1k car. Get a reliable old Japanese model.

Would they really push for another sale to realise what would amount to a tiny amount of money compared to what creditors are due?

YES. The money won't be going to the creditors at all, it will be paying their fees

A 3.3k car will definitely be sold. Yes there may be exceptions if your business depends on that type of car, a hearse has been mentioned. But you need a car to get you around rural areas, you don't need an expensive one.

Worcsman

dojoman wrote: »

These so called "experts" have not got a clue what they are talking about, seek advice from one of the debt charities asap otherwise you are in for a big shock.

never claimed to be an expert but i have been through the process. what i suggested has stood the test of truth. the guy should sell his car before the OR takes it. And for the record, I took the advice of the CAB - a debt charity and a year or 2 down the line, it turned out to be the worst advice I could have taken. If I had looked here first and took the advice of those who dont have a clue what they are talking about, instead of listening to what you call the so called experts said, I would be in a much better place now. Have not got a clue what I am saying? Oh yes I have. Take your opinion and flaunt it elsewhere, it is a moissanite and it's worth.. naff all. OP, do what you feel is right but 100% listen to those that have been there and done it. You have to balance it out with little nuggets such as you will get from this erm... person don't want to swear but fill in as you feel ness.. but on balance, we bankrupts have been there, got the t-shirt and do have some advice worth reading.

Worcsman

thinkpositive1 wrote: »

As for selling the car before petitioning for BR, we have advice saying that would need to be declared if sold within 3 months prior to going BR, within 12 months prior (this seems to be the guide on SOA form) and other advice saying declare it if sold within 2 years of petitioning BR. Then we have feedback in the thread saying someone sold their vehicle worth £7k prior to BR and the OR had no problem with that!
That was me, I sold my car the week before BR, got 7k, spent it nealry all on my rental house after leaving my mortgaged home, told the OR during the interview what I had done, he asked what I spent the money on, I told him, he was happy with it. No proof was asked for. The advice came from this forum and was spot on. I spent 2k on a banger to run around in, which this forum also said the OR wouldnt be interested in. All the advice from here has been spot on so far.

dojoman

Worcsman wrote: »

never claimed to be an expert but i have been through the process. what i suggested has stood the test of truth. the guy should sell his car before the OR takes it. And for the record, I took the advice of the CAB - a debt charity and a year or 2 down the line, it turned out to be the worst advice I could have taken. If I had looked here first and took the advice of those who dont have a clue what they are talking about, instead of listening to what you call the so called experts said, I would be in a much better place now. Have not got a clue what I am saying? Oh yes I have. Take your opinion and flaunt it elsewhere, it is a moissanite and it's worth.. naff all. OP, do what you feel is right but 100% listen to those that have been there and done it. You have to balance it out with little nuggets such as you will get from this erm... person don't want to swear but fill in as you feel ness.. but on balance, we bankrupts have been there, got the t-shirt and do have some advice worth reading.

That wasn`t aimed at you, if you read the OP they refer to seeing 2 experts who are giving incorrect advice, especially about the car. Your post has me somewhat baffled????? The advice you gave was fine so why the aggressive response to my post or am I reading your last post wrong? Please tell me where I refer to your posting, your rant has totally baffled me. This forum is a godsend, I too have the tee shirt, been there and done it, 5 years in now only 1 year left so I also know what I am talking about and have offered a lot of advice on BR over the years, hence the number of thanks.

thinkpositive1

Anyone know what the situation is regarding tax arrears? Does tax relating to the financial year in which you petition for BR get included in the bankruptcy estate...i.e. would it include 2013-14 tax year if BR petition submitted before the end of March?