Tax Debt

Joecool11us

Hi folks I need your help/advise. I was on self assesment up to 3 yrs ago. Due to a messy split up of my marriage I lost it a bit and did nothing about filling in tax returns for the last 1yr and 3 months of my self assesment. In the meantime i have done nothing to resolve this and now I have been served with bankruptcy papers to be heard in court on 23rd Oct.

I owe £5131.00. I have about £1500 on 2 credit cards and an outstanding bill from solicitors for £1500 for the divorce courtesy of my ex wife. I am employed, dont own my house, have a car worth £900 and about £1000 I can get my hands on.

What is my best option. I have received a letter from a "solve your debts" company of accountants offering free advice as to my options. should I contact them or what are my options.

Thanks in advance

Joe

fermi

Do you have any way of settling the amount owing to HMRC?

Have you been in contact with HMRC to negotiate (I know they are pains to negotiate with)?

It it a formal court date you've been informed about, and where is it? HMRC usually use the HCOJ so I'm told.
Was a "statutory demand" served on you by HMRC first?

Sorry for all the questions....

Forget the "solve your debts" company. They will rip you off. If you need to, it would be much better to seek your own solicitor so you know they aren't rip off merchants (as least as far as solicitors go anyway).

rog2 on this forum has personal experience of being petitioned for BR by HMRC so hopefully he see this and post later.

There is also the Bankruptcy & Living With It board as well.

Joecool11us

Thanks Fermi.

It is the HCOJ Belfast. I have not been in contact with HMRC (sorry typical head in the sand here). Yes I did get a Stat Demand (but more head in the sand)

The only way I can think of trying to settle is to get a loan which I know I can manage as long as its on direct debit! Will being listed on the insolvency list already affect my ability to get a loan?

Joe

fermi

You shouldn't appear on the Insolvency Register until the bankruptcy order is granted (assuming the Regs are the same in NI).

So no, I don't think it would effect your ability to get an loan (yet).
The "solve your debts" company is probably trying to offer you a loan at horrendous rate a part of their solution.:eek:
You would be able t get a much better deal elsewhere.

First, as painful as it is, you probably need to contact HMRC (there is a dispute resolution number/line somewhere ) and see whether they are still prepared to stay court action if you make an offer of settlement.

If you contact National Debtline or CAB (see my signature) they may also be able to point you in the right direction of legal advice relevant to NI. If not, it would be worth contacting a solicitor yourself, as many do a initial free consultation.

It's always worth considering letting HMRC just go ahead and do it. Depends on what you have to lose, and how much you are going to want credit in the future.

immoral_angeluk

You definately need to contact the HMRC as soon as poss. Explain to them what happened and that you want to get it sorted out.

Do not have anything to do with the 'solve your debts' people.... they'll just take you for a ride. For genuine FREE advice contact the CCCS, citizens advice or payplan...

Good luck. the worst part is dragging our head out of the sand...

rog2

Hi jc - If HMRC have served a Statutory Demand, they really do mean business. I was served a Statutory Demand, by HMRC, in very similar circumstances to yourself, for an assessment, with penalties, of £74k.
I did speak to the contact solicitor, who was only interested in two things:

1. Could I pay the amount on the assessment? She was NOT prepared to accept any offer of deferred payment.
She went on to say that even if I made payment, I still had to send in the outstanding assessments and could still be liable for further penalties.

2. Could I get the outstanding Self Assessments in within 24 hours, in which case they would 'hold' off br proceedings whilst the assessments were being processed and on payment of any tax due.

As I was unable to comply with either of the above conditions HMRC went on to petition for my bankruptcy.

Unfortunately HMRC is responsible for by far the largest percentage of creditor petitioned bankruptcies in the UK, yet they can be one of the LEAST helpfull (in my experience) bodies to have to deal with. I am tempted to believe that there is a certain 'attitude' that is inherant in 'tax officers', so my advice may be slightly biased.

However - I would suggest talking to one of the Debt Counselling Charities, such as CAB or Taxaid (which is a charity dealing specifically with HMRC problems) which you will find at; http://www.taxaid.org.uk

Joecool11us

:hello: Thanks guys for ur advice.

I rang CCCS and Taxaid, both very helpful and CCCS have arranged a debt counsellor to ring me tomorrow but they acknowledged that I dont really have bad debt probs just this flipping prob with HMRC.

So then I picked up the courage and rang HMRC. Not a particularly pleasant experience. For instance when, at the end of the conversation, I asked the person dealing with me for her name she said its MRS H******. :rolleyes: She obvioulsy didnt want to be too matey with me!!!!

Anyway the outcome is that if I fill in my missing returns and pay up the reassessed amount b4 the court date comes around all should be ok.

One further question! They have estimated my income for 03/04 and have arrived at a figure that I am quite happy with. Can I accept their estimate without filing the return and just file the one for 04/05 in which I only worked 14 weeks self assessment.

Thanks again for the advice. :beer: I dont know where ppl like me would be without ppl like you.

Joe