Do I go bankrupt again?

bradztheman

Right, I last went bankrupt in June 2012 and will be completely free from it in June 2018, so not long to go, however..

I have debts now amounting to

£3650 in credit cards
£10,000 to £17,000 to the tax man

So a possible £20,000.

If it wasn’t for owing so much in tax, then i definately wouldn’t be considering bankruptcy again, so they’re basically forcing it upon me.

Over 4 years, I calculated my own tax rebate only, and to my knowledge i did it accurately!

However on the 4th year (this year) i put in a rebate of £3500 as i am self employed and fully entitled to a rebate of atleast £2000 as i shouldnt be paying tax on the first £10,500 that i earn, however the company i work for we’re deducting it automatically on a weekly basis which is normal as i would just claim it back at the end of the year anyway. I did lots of miles each day too, most days travelling atleast 100 miles a day, which they give you an allowance of 50p a mile, and other expenses for things like clothing etc, so each year was going to be a highish amount (£3000 - £4000)

Anyway the tax man says my returns were innacurate and has charged me around 70% for inaccuracies! He has also only given me an allowance of £1200 a year, and the rest has to be paid back, which i don’t agree with.

I did my self assesments myself instead of paying an accountant as i thought it was the best way, and saved me £300 a year.

Do i, or can i go bankrupt again?

Do i go to a debt management company and just pay the minimum amounts that i can for 6 years and then wait for it to get written off?

With bankruptcy, within my first year i didnt work as i was off due to ill health, my debts were all written off.

However if i go bankrupt again this year, has much changed? Do i have to set up a payment arrangement with the official receiver and if i do, do the payments last 1 year or 6 years? I cant remember. Really stuck on this one and what to do...

Arleen

I am not sure about the bankruptcy part, but it's not too late to get an accountant, so do that - they can fill in corrections to your returns, even if they are from years ago. And an experienced accountant can do wonders for you, and in the worst case, you will spend ~200-300 quid for a chance to not go bankrupt.

BorisThomson

No one is forcing bankruptcy on you. You need an accountant to sort out the mess you've made of self assessment.

Which expenses are HMRC not allowing?

however the company i work for we’re deducting it automatically on a weekly basis which is normal as i would just claim it back at the end of the year anyway.

If you "work for" an employer you are employed. Is this part of the issue? What is the company deducting?

bradztheman

My ‘employer’ was paying 20% tax each week out of my wages which is the norm as i am self employed, but not ltd company. They call it a CIS subcontractor.

The letters I received are stating ive done something deliberate, i didnt reply to their last letter they sent 3 months ago as i had a fall out with my mum and was livin elsewhere, however im now speaking and shes decided to give me my mail. If im correct i can’t dispute this now? So nearly £10,000 in penalties ALONE! I dont know what PLR means but its certainly not the amount I received for each year.

Arleen

You can dispute it, especially if you've made a mistake in previous returns and those need to be corrected, so get an accountant now. Don't know where you live but most will give you free 30 minutes consultation, so take your paperwork go meet them for 30 minutes and you will have a much clearer picture of the case.

BorisThomson

You are in a complete mess. This isn't just a one off issue, and to put it bluntly, they're throwing the book at you.

Call HMRC today and tell them you have only just received the paper work and why. I doubt they'll be too helpful, you've missed the deadline for reply and repeatedly ignored them in the past, but you need to start communicating with them. Then you need to contact an accountant. There's nothing they can do for you in half an hour, and defending this mess is going to be costly.

Please keep in mind that tax evasion - which is what HMRC is accusing you of - can also be subject to criminal prosecution. You must deal with this and not think that bankruptcy will make it go away. It will not.

bradztheman

Most charge £200-£300 (for each year), i dont have this sort of money especially seeing as i dont have work in the new year. From my point of view i think it just seems a hell of a lot easier to go bankrupt, im over 2 months over credit card late payments..

What is the deal with going bankrupt these days, can you pay the £700 on a monthly basis?

BorisThomson

bradztheman wrote: »

Most charge £200-£300 (for each year), i dont have this sort of money especially seeing as i dont have work in the new year. From my point of view i think it just seems a hell of a lot easier to go bankrupt, im over 2 months over credit card late payments..

What is the deal with going bankrupt these days, can you pay the £700 on a monthly basis?

£300 will not even start to cover a long term tax investigation.

You have been advised repeatedly (on previous threads and today) to speak to an accountant. Bankruptcy is not the easy option you think it is, and if HMRC think you are doing it in order to avoid your debt, that will push them towards prosecution.

Contact an accountant today.

bradztheman

I have tried calling the contact number. Because of my other debt i have not been in a position to cover £1000 plus for an accountant

bradztheman

BorisThomson wrote: »

£300 will not even start to cover a long term tax investigation.

You have been advised repeatedly (on previous threads and today) to speak to an accountant. Bankruptcy is not the easy option you think it is, and if HMRC think you are doing it in order to avoid your debt, that will push them towards prosecution.

Contact an accountant today.

I can not afford an accountant, i just dont have the money!

bradztheman

Reading this apparently hmrc can make you go bankrupt, or even write it off in special circumstances

http://taxaid.org.uk/guides/taxpayers/tax-debt/bankruptcy