Can HMRC take my house?

getmore4less

The question that needs asking and answering is who has the money?

If it is employees tax deductions then the money must have gone somewhere between leaving the employer(or whoever is funding) and the employee getting paid.

Laurensalive

This person must have been filing self assessment tax returns to HMRC. Professional advice is needed. HMRC are under pressure to get any unpaid tax back. So this means the courts would class the house as an asset.

silvercar

If you read the bankruptcy board on here, you will see that failure to pay tax and not come to an agreement with the revenue can mean hmrc making the person bankrupt. They seem to do this even in cases where the person has no assets. They would then leave it to the official receiver to ascertain assets and repayments.

A person with no assets other than equity in their home (of greater than £10-15k) would most likely find that being bankrupt does not impact their day to day life other than not being able to get credit. If they were on what was assessed as a low income only sufficient for their needs, they wouldn't have a monthly payment requirement. However, after 2 yrs and 9 months the OR will look at the equity in the home and want someone associated with the bankrupt to buy the beneficial interest in the home or the home sold.

antonic

echo84 wrote: »

Hi all, I'm asking this for a family friend, so I don't have all the specifics....but a summary of the issue is -

FF is an employer, who has one employee on their books as a personal assistant, they do not own or operate a business in any sense. Somehow (while paying a payroll company to ensure tax has been paid correctly) they've managed to amass a debt of in the region of twenty thousand pounds. Apparently the HMRC want it paid now and FF obviously can't put their hands on that amount of money over night and will probably need to take a loan against their home to pay the money back...

So my question is - what can HMRC do to get the money back? FF has no assets what so ever, and is on a very low income also, and the amount they could afford to pay back monthly would do nothing to repay the debt and thus HMRC have threatened court action.

Does anyone know what HMRC can actually do to get the debt paid off in this situation?

Before we can help the following questions needs to be answered

1) What type(s) of tax is involved (SA/CT/PATE/VAT)
2) How many year(s) does the underpayment cover
3) Is there any equity in the house and will it cover the debt in full ?.

As a general quideline (as others have said) HMRC will expect all avenues to obtain funds to be explored first before pleading poverty

HMRC do not like voluntary charges on properties (if there is sufficient equity) because they dont know when the homeowner will die and want to be paid pdq.

HMRC will make someone bankrupt if there is no realistic proposal of the debt being quickly and the debtor refuses to cooperate.

HMRC will still pursue the debt even if the debtor takes legal action against the payroll company, because that is of no concern to HMRC.

chrismac1

Whoever your friend is should get quality advice from a qualified insolvency specialist NOW. I operate as an accountant, there is one excellent practice in my neck of the woods which I refer all clients who are having liquidity problems too. They have given consistently very good advice to them, including resuing a few companies from insolvency when not going to them would have led to liquidation.

Your friend should approach someone like this, ideally locally. Failing that I can give you the details of the one I know if you PM me. Note that plenty of insolvency practitioners are of the unethical "churn 'em and burn 'em" variety so it is important to find someone who puts the interests of your friend first and his or her fee bill second.

GingerBob_3

Can HMRC take my house?

They can take the shirt off your back, and wouldn't think twice about doing so. After all, you're a CUSTOMER of this obnoxious organisation.

SeniorSam

A liability needs to be repaid and the Revenue has the powers to obtain what is lawfully due. However, if you allow this matter to go to court, you will undoubtedly add considerably to the present debt.

If you have a meeting with the Revenue and discuss how to agree payment, it will be better for you.

If you are able to raise a loan on your property, that may be one way, although it may be that they would accept a legal charge against the property for the debt, possibly with interest to be added.

You need to speak with them and not just look the other way, which will be very costly. They DO understand that some people make mistakes and get into difficulties and they know how these matters can be settled without the expense of court actions if you are prepared to agree. A meeting will give you more information to discuss with professionals if necessary, but no p[oint ig getting into more debts with professional feess at this time until you know if the Revenue will suggest a suiotable option.

chrismac1

Twenty years ago the previous post would have been excellent advice. But not now. The quality of HMRC staff is simply not up to the job. To give but one example - and unfortunately I can give many:

I met with HMRC Debt Management regarding a client who had severe cash flow problems. Halfway through the meeting the following exchange took place:

HMRC: You do realise your house is at risk here.
Client: (looking shiit scared) Yes
Me: Do you want to re-phrase that last sentence?
HMRC: No.
Me: Then I will. This VAT liabiity is with a limited company of which my client is a 100% shareholder. Should the limited company fail to pay this debt its assets could be at risk. It's assets do not include my client's house, ergo her house is not a risk.
HMRC: big silence

So meeting with HMRC in this situation without representation is in my view extremely risky and could lead to big trouble. A common feature of such meetings is that people agree to completely unrealistic payment schedules, under massive pressure from the HMRC person. When the debtor inevitably misses the schedule, all he or she has done is made things worse.