Tax Debt...

bytheseas

Probably the worst 12 months of my life.

Pre warning this is as much for me to get it out and have a rant as it is to ask for advice. So sorry in advance. 12 months ago today, literally today. I got the keys to my house (Own). After splitting with the mother of my daughter I used my savings as a deposit and spent the rest renovating/starting again with furnishings and such. All was well, other than the break up and struggling as a 50/50 custody working parent.

Then business earnings started to drop I had enough to still live on and no debt other than the mortgage so it wasn't the end of the world. Then I get a 7.5k corporation tax bill. Completely wipes company bank account. 3 months later 6.5k personal tax bill. Had to setup a payment plan for that. Still got 2 payments left on it. Month after that 1.4k bill from accountants (Still to be paid).

I managed to get myself a part time job literally a mile from home just working 16 hours a week the days I don't have my daughter. This brings around £550 a month. The money the company is making 90% of that goes straight to the payment plan and the earnings are dropping month on month as I'm able to work on it less/change of market.

Paying back tax from my best year ever out of earnings from my worst year ever is really something else. Especially after having to fork out to start my life again after the break up.

On top of this my mother was diagnosed with cancer a few months back which appears to get worse every time she has a new treatment or scan. My car died on me a few months back and had to be replaced too.

I'm literally at the point of auctioning off my possessions on ebay just to be able to make my direct debit payments and have been like this for probably 8-10 weeks now.

I'm at the point now where I'm not sure I can take much more. Thought I had enough to cover the month then boom £45 ebay selling fees destroys my plan. Very little food in the house. Literally not a penny in my wallet. My ex has been kind enough to lend me £10 so I have enough for my next bill coming out on monday but with another 4 at the end of the month it's just feeling like an endless battle.

I work my own business when my daughter is sleeping and working for someone else when she's at her mothers. I can't have her in nursery my days as I can't afford it and her mother already uses her free hours.

I'm apparently not entitled to any help. Although the ex has started giving me £34 a week as of a month ago, to help out (half child benefit/child tax) which has really really helped.

I just don't know what to do. Tempted to sell the car but then can't pickup/drop off my daughter or get to work (no public transport to it).

I just keep thinking "Only 2 payments left" but then remember the accounting fees too. So I'm probably going to be in this same position for at least another 3-4 months. I'm honestly at my whits end.

The idea of just being able to walk into asda and not worry about what I put in the trolley can't leave my mind. I keep thinking of supermarket sweep haha. I can't even afford to take my little one to soft play at the moment. Luckily it's starting to warm up so we can use the play parks more.

Any words of encouragement or advice?

lindez

So sorry you have had a rough time of it lately. I am new to the forums though from what I have read on some threads there will be lots of encouragement and advice for you. LD

patman99

First off, welcome to the forum.

If you are struggling, then a trip to the foodbank will help. You don't need to be on benefits to use them either.

Are you sure that you are not entitled to any kind of benefits?. If you work more than 32 hours a week and your earnings are equal to, or greater than NMW, then you should be able to claim Working Tax Credits (these are available to the self-employed as well as the directly employed). Not sure you would get Child Tax Credit as well as you only have your daughter living with you for half the week.

Also, is your business a limited company?, or are you a sole trader?.

HampshireH

If you have 50/50 custody why aren't the financials done in the same way.

I.e. why are you expected to fund child care whilst your ex uses all of the free childcare available?

Why does your ex routinely receive the whole of the child benefits when you have your child 50% of the time and shoulder 50% of the costs that come with custody?

I know you a say she is helping out by passing this on now but perhaps consideration should be given to a more permanent arrangement?

I don't have kids so apologise if I have misinterpretated how child associates benefits and child care work.

bytheseas

Thanks for the welcome patman

I've done the calculator a few times and apparently not.
Not sure if I'm classed as earning too much still as the monthly tax I'm paying is still classed as earnings even though it's going directly to HMRC.

I own a LTD company. However I will probably change that over to sole trader this year as the earnings are now too small for there to be any benefits in being a LTD company.

bytheseas

HampshireH wrote: »

If you have 50/50 custody why aren't the financials done in the same way.

I.e. why are you expected to fund child care whilst your ex uses all of the free childcare available?

Why does your ex routinely receive the whole of the child benefits when you have your child 50% of the time and shoulder 50% of the costs that come with custody?

I know you a say she is helping out by passing this on now but perhaps consideration should be given to a more permanent arrangement?

I don't have kids so apologise if I have misinterpretated how child associates benefits and child care work.

Honestly I think if I did approach her asking for half the child care she would share. However my daughter is already in 30 hours a week (8am - 6pm) on her mothers days that I have tried to avoid putting her in more. But yeah, unfortunately it may be time to start thinking about this.

She has actually set up a weekly standing order. I will get that money each week going forward. She set it up as soon as I asked if I could have a share too. I maybe left it a little late... Male pride kinda thing and all that.

HampshireH

It's good that she is supportive and making joint arrangements easy.

I would consider sharing the childcare free hours and then equally sharing the cost for the other days where you don't have free childcare and may need to pay for it.

Goodluck I wish you all the best

Pixie5740

Is your business actually viable long term or is this just a blip?

4 months isn't that long in the grand scheme of things if you can muddle through. Is the car absolutely necessary? You say your job is only 1 mile away so could you walk/cycle instead or do you need a vehicle for your company? Could you collect your daughter using public transport and taxis if that worked out cheaper than running a car?

newbie1980

have you enquired if your personal tax bill is 50% off your next year bill

if so this may give you some lea way

bytheseas

Pixie5740 wrote: »

Is your business actually viable long term or is this just a blip?

4 months isn't that long in the grand scheme of things if you can muddle through. Is the car absolutely necessary? You say your job is only 1 mile away so could you walk/cycle instead or do you need a vehicle for your company? Could you collect your daughter using public transport and taxis if that worked out cheaper than running a car?

Unfortunately it is required although work is close. There's literally just 1 60mph country road to it. Which I wouldn't feel safe walking. My insurance is already paid for the year anyway so would probably end up costing more in public transport than it does in petrol. The only plus would be the 2-3k I would get from the car sale.

Is the business viable... that's a difficult questions. I could still live on it's earnings now if it wasn't for the tax re-payment. But it's a funny market (mobile games) it's the sort of thing where my earnings could vanish to 0 overnight, I could be a millionaire next month or anywhere in between. However with how little time I get to spend on it lately it's probably only going to continue going down.

I have started second business (services) which I'm trying to get off the ground. It should be a little more stable once established. It's just hard finding the time and money to really get it going.

bytheseas

newbie1980 wrote: »

have you enquired if your personal tax bill is 50% off your next year bill

if so this may give you some lea way

Part of it was for next year but not 50%. I had 200ish a month taken off the bill and a month removed from the payment plan but that still leaves another 2 payments.