Need help!

Beaglesabout

Hello! Thanks for reading. Myself and my partner owe £12,000 to HMRC. We want to pay them back, obviously, but they won't accept less than £1000 a month as they say it has to be paid off within a year. Now we cannot afford that by any stretch, especially as my partner has recently had to give up her job in order to care for her disabled mother. We have no other debts. We own our house outright (we inherited it) so we were thinking of getting a mortgage or other loan secured on the house in order to pay back hmrc in full and then make repayments over a longer period to the loan or mortgage company. Our worry is that we won't get a loan or mortgage based on our income for the past three months as my partner hasn't been working and I was in hospital for most of that time. We also worry that our issues with this debt (again, it's our only debt) will have ruined our credit score. My father in law has offered to act as guarantor on a mortgage or loan so he will make repayments if on a given month we can't afford it. Is this something we can do? Is it worth applying for a loan or will a rejection just hurt our credit further? Any advice appreciated! We are really struggling to find a solution. Thank you.

[Deleted User]

It's not your credit score that will be looked at - it's your credit history.

You need to engage a decent broker - one with experience in adverse credit - to see if there is a lender would entertain this.

PeacefulWaters

Downsize perhaps.

Geoff1963

My father in law has offered to act as guarantor on a mortgage or loan so he will make repayments if on a given month we can't afford it.

It would be equivalent to him taking on the loan, and you giving him the payments each month. That might have a better rate and / or chance of success.

[Deleted User]

I honestly think that you should apply for a mortgage/secured loan in your own right. At the moment you do not have adverse credit as you have no debts - I cannot see how the HMRC debt, at this stage, would hinder your application.

Having done this, I would contact HMRC again and advise exactly this - ' you are seeking to raise finance by remortgaging your home and ask for two/three months grace'. This will take their box and I would expect them to agree this. This is on the provision that there are no future liabilities which they will take into account.

I deal with HMRC day and daily - there are worse organisations to deal with when it comes to debt!

Candyapple

Do you work? If so, what's your salary?

You are essentially seeking a £12k loan so you'll need an excellent credit history plus a high salary.

Have you checked your credit files? What do they say?

The free versions to check your credit files are below:
Experian: https://www.moneysavingexpert.com/creditclub
Equifax: https://www.clearscore.com
Call Credit: https://www.noddle.co.uk

And here is the loan eligibility calculator, enter your details to see what it says:
https://www.moneysavingexpert.com/eligibility/loans-calculator/

TrustyOven

I struggle to believe that you owe that much to HMRC.
Have they made a mistake? I'd be questioning whether it's a clerical error on their end.

What do they say you owe them for?

12k is almost double what I pay to them for income tax - and that's not on a small income either. If they were not collecting income tax via PAYE then I'd be upset and it would be their fault and not mine - would not have to be financially impacted due to their mistake.

I think we need more info.

[Deleted User]

TrustyOven wrote: »

I struggle to believe that you owe that much to HMRC.
Have they made a mistake? I'd be questioning whether it's a clerical error on their end.

What do they say you owe them for?

12k is almost double what I pay to them for income tax - and that's not on a small income either. If they were not collecting income tax via PAYE then I'd be upset and it would be their fault and not mine - would not have to be financially impacted due to their mistake.

I think we need more info.

Surely it is tmost likely to be tax due on a partnership business?

Arleen

[Deleted User] wrote:

Surely it is tmost likely to be tax due on a partnership business?

That would have to be one successful business to attract 12k worth of tax on the dividends. So while there may be some merit to raising a complaint about it, best to talk with a professional accountant about it, as this required digging through documents and talking with multiple HMRC departments at this stage.

If you have to resort to taking money from your uncle, have him take the loan in his name and you will repay him. It's the same as guarantor but at lower interest rate and with an apparent situation to your uncle that it's his debt to pay off.

National_Debtline

Hi Beaglesabout

Welcome to MSE. First of all, be cautious about taking out a mortgage or secured loan. If you cannot afford the repayments your home will be at risk. What type of debt do you owe to HMRC? Income tax, VAT, a tax credit overpayment? And if it’s business related, are you still self employed?

I would advise you to get some specialist advice on this, in certain circumstances HMRC may consider allowing up to 36 months to repay a debt. If you could extend the time to pay it could avoid you taking out further credit, and the interest charges that would bring with it. You will need to complete a statement of affairs (SOA) to show them you are in financial hardship http://www.stoozing.com/calculator/soa.php.

If this is a business related debt you can also contact Business Debtline for advice www.businessdebtline.org. You may find it useful to post this query in the debt-free wannabe board. Good luck.

Susie
@natdebtline

[Deleted User]

[Deleted User] wrote:

I honestly think that you should apply for a mortgage/secured loan in your own right. At the moment you do not have adverse credit as you have no debts - I cannot see how the HMRC debt, at this stage, would hinder your application.

Having done this, I would contact HMRC again and advise exactly this - ' you are seeking to raise finance by remortgaging your home and ask for two/three months grace'. This will take their box and I would expect them to agree this. This is on the provision that there are no future liabilities which they will take into account.

I deal with HMRC day and daily - there are worse organisations to deal with when it comes to debt!

Arleen wrote: »

That would have to be one successful business to attract 12k worth of tax on the dividends. So while there may be some merit to raising a complaint about it, best to talk with a professional accountant about it, as this required digging through documents and talking with multiple HMRC departments at this stage.

If you have to resort to taking money from your uncle, have him take the loan in his name and you will repay him. It's the same as guarantor but at lower interest rate and with an apparent situation to your uncle that it's his debt to pay off.

Dividends? Where has the op even mentioned that the business was incorporated? As you say - unlikely to be PAYE or tax on dividends - hence my assumption that it is most likely to be Schedule D tax on a business that has now ceased, most likely in partnership.