Overdue HMRC debt (to say the least) - bankruptcy threatened

dipshit123456

I've been massively useless for the last 7 years. I've been self-employed, made very little money, and not paid any tax. I'm eternally optimistic and figure everything works out ok in the end, so I've mostly ignored this problem.

Every few weeks a letter'll turn up from HMRC, and I put it in a pile with the other ones. Real grown-up behaviour!

My personal situation is improving a bit these days. I'm don't have bouts of depression any more (never been to the doctor about it, so if that's a "play", I don't think it'll work here!), and I'm more able to work on a daily basis, and the work I do is making a bit more money, year on year.

It's still not much though - I might make £30k this year, £40k if I'm really lucky/tenacious.
I'm hard at work on version two of my business's website, and I'm optimistic that it might bring in much more income if it's a success. But I might be dreaming, and even if I'm not that success is a couple of months away at least.

So today a signed-for letter arrived from HMRC. Eek, they've never done that before. I reluctantly sign for it, and figure it's time to man up and open it.

"Warning of bankruptcy action".

!!!!.

They've determined that at this stage I owe them £16k. That's a lot of £100/£300/£900 late-filing penalties, a £4k determination from 2010 and a bunch of interest.

The real amount that I owe? !!!!ed if I know, but probably closer to £25k.

I called them up and they want payment in full now, and for me to complete all my past returns. I have 14 days to do this.

Or - at best - payment spread over the next 12 months. Again, all returns to be completed in 14 days.

I really doubt that I can afford that.

I asked if it's possible to spread payments over a longer period, and they said no, due to my past uselessness.

I'm pretty sure that I want to avoid bankruptcy if I can, right? If I do have bankruptcy, what "assets" are sold? I rent, and I have a vehicle worth ~£5k or so. Will they take more than that? Will they take my mountain bike, my TV, my computer, what?

So, is it possible for me to avoid bankrupty somehow? I accept the debt, and I want to pay it off. I've been a bad citizen, and I want to be a better one, and I don't want this shadow hanging over me forever.

But I'd like to pay it off over a longer timescale.

It won't shock you to know that my credit limit is in the toilet. I have other debts to old credit cards and stuff, all with debt collectors. I very very very very VERY much doubt I can get a loan to pay HMRC off, and I suspect it would be financially foolish to do so anyway.

I know I'm the non-paying scum of society, but I want to be better. Please help me.

sourcrates

Hi,

Making you bankrupt would serve no purpose as you have no assets to speak of, so that's a bit of a non threat in all honesty.

Best advice is get your returns sorted out, as they have asked you to do, then try and negotiate a better repayment plan, do it in writing, as you bypass the call centre staff, and have evidence of what's been offered/agreed.

sourcrates

So you have in excess of 30k of total debt.

HMRC are not going to go away, if it were me I would want a quick and permanent solution, even more so if I were getting married in 6 months.

Why don't you discuss your options with National Debt-line ?

Personally I think they would recommend Bankrupcy to you, but best to get some professional advice before making such a big decision.

fermi

sourcrates wrote: »

Hi, Making you bankrupt would serve no purpose as you have no assets to speak of, so that's a bit of a non threat in all honesty.

Not always the case.

HMRC have a habit of petitioning for bankruptcy as a matter of policy in many cases, even when it's glaringly obvious that it will cost them money and they will get no benefit from it.

It is surmised that it's a case of:

- making an example of people who can't/won't pay ASAP.
- as a way of simply closing the case on something that otherwise may drag on for years.

If HMRC are threatening bankruptcy proceedings, then it is quite possible they are very serious,

fermi

I would ring --> https://www.businessdebtline.org/

Also worth reading about HMRC and bankruptcy --> http://taxaid.org.uk/guides/taxpayers/tax-debt/bankruptcy

antrobus

fermi wrote: »

Not always the case.

HMRC have a habit of petitioning for bankruptcy as a matter of policy in many cases, even when it's glaringly obvious that it will cost them money and they will get no benefit from it.

I second that motion.

As a general rule, if you don't pay HMRC, they will make you bankrupt. Which can be quite useful if you want to go bankrupt, because it means they will pay for it.

sourcrates

antrobus wrote: »

I second that motion.

As a general rule, if you don't pay HMRC, they will make you bankrupt. Which can be quite useful if you want to go bankrupt, because it means they will pay for it.

Ah well, there you go.

Save yourself the fee !!

National_Debtline

Hi

I agree with fermi's suggestion of contacting my colleagues at Business Debtline. They'll be the best people to advise you on your whole situation and options.

www.businessdebtline.org

James
@natdebtline

National_Debtline

dipshit123456 wrote: »

Any difference between volunteering to be bankrupt and being MADE bankrupt, other than who pays the fee??

No, the process is identical either way. As you say, it is simply a matter of who stumps up the fee. The petitioning creditor (i.e. HMRC) would not get any preferential treatment over and above other creditors in your bankruptcy.


Dennis
@natdebtline

fatbelly

From what you've said the only downside is that the car would probably go.

If you can show that you need the car then you can have £1000 back for one.

You sure it's worth 5k? What does it show on Parkers in poor condition?

Just put the registration in (if it asks for email details just put something fake in there) and you will know precisely what the value is. The OR uses the site for valuations in other strategies, and have said they would ignore the value of an essential vehicle if <£1500.

pelirocco

sourcrates wrote: »

Hi,

Making you bankrupt would serve no purpose as you have no assets to speak of, so that's a bit of a non threat in all honesty.

Best advice is get your returns sorted out, as they have asked you to do, then try and negotiate a better repayment plan, do it in writing, as you bypass the call centre staff, and have evidence of what's been offered/agreed.

HMRC don't do non threats , they make people bankrupt and wind companies up just to prove a point, especially if letters have been ignored.
If there has been a threat of bankruptcy letter the OP needs to act quickly and contact the person/department the letter has come from.If they agree a payment plan then it has to be adhered to, one missed payment and there will be no second chance