HMRC tax arrears within BR and allowable car valuation

thinkpositive1

dojoman wrote: »

That is not quite right, if you go BR in April any tax owed prior to BR will go into your BR, for the remainder of the tax year after your BR, any tax due will have to be paid to the OR under a Nil Tax code. That means it will not go to the HMRC but will go towards the costs of your BR.

Just to check:

Year 2011-12 tax: I have not been able to pay this yet and HMRC could go with a payment plan for the arrears but with 2012-13 on top and my IVA I can't see it being do-able. So that deffo goes into BR

Year 2012-13 tax: accountant did my return for last month. Not paid any tax yet as 1st instalment on account due in summer 2014 and the rest next Jan. Does this all go into the BR estate?

Year 2103-14: nearing the end of this current tax year. If I go BR now are you saying all the tax that will become due and payable will (when the amount is known - which won't be til next Jan when account does my return) go into the BR?

2014-15 tax year becomes a Nil Tax Code year? As I am self employed, the tax I set aside for 2014-15 income will then go to the OR when it becomes payable or as I progress throughout the BR year before discharge?

thinkpositive1

Sorry to labour the point but I have now had advice from 3 respected sources (my Insolvency Practitioner, Business Debt Line and a Solicitor specialising in bankruptcy).

All of them have said not to worry about losing my car (now valued at circa £3k to £4k) and seem entirely relaxed that the OR would let me keep it. The feedback ranged from "they won't trouble you for something that old (10 years) and needing a fair bit of work doing to it", "it's more hassle than it is worth for an (overworked) OR to take this off your hands and have to sell it on / auction it so don't worry too much" to "it is highly unlikely that an OR will repossess your vehicle as you are permitted within reason to get from A to B".

Some on here have said a car worth anything more than £1,000 will be seen as an asset and the OR will want it and the threshold used to be £2k.

Lots of advice and people obviously have different views and experiences.

Whilst those who have been through the process / seen it / done it / bought the t shirt will clearly know what's what on this issue, there surely has to be some credibility to the advice from a BR legal expert, Business Debtline and my IP????

Who's right and who's wrong?

wildheart83

I can't say who's right and who's wrong but in my case I had a 12 yr old banger that was literally falling apart and the AIB (I'm in Scotland) made me justify why I needed the car instead of using public transport. I had to send in a cost comparison car v bus/train and show the route I had to cover to get to work. I mentioned that I used the car to drop my mum off and pick her up on my way to and from work and was told that it's not my responsibility to get other people to work.

I'm not saying definitively whether you'll get to keep it or not, but I'd be prepared to fight and/or pay the beneficial interest in the car.

There are others who have had cars worth next to nothing taken by the OR but they can tell you their story, I'm just giving mine.
I do hope you get to keep it but, be prepared to have a solid and comprehensive case for keeping it. good luck

woodformoretrees

I guess it's one of those things that you won't know until it happens. Nobody can guarantee how it will go - I think you maye need to presume that they will take it (worst case scenario ?) and then it's a bonus if they don't.
I wonder if there's a difference because of your SE status and other posters maybe not being SE?

queensland

It sounds like each OR is different. I had a £2000 car and justified that I need this as I did a 100 mile round trip to work, as well as needing the car whilst at work.

I was allowed to keep it, but the car needed so many repairs in the end that I struggled to pay for them (£35 a month was nowhere near enough in this scenario). I ended up having to do a direct swap for an older, but hopefully more reliable car!

debtinfo

Its not really that each OR is different. More that each bankrupts situation is different. The ORs guidance is clear and available for everyone to see online.