Information much appreciated

2021para

Hi everyone,

So I'm not actually here for myself, rather I'm trying to support someone close to me with a lot of debt they're going through and I'm just looking for a bit of advice/clarification around some bits I don't fully understand, and to be honest I don't really feel that they understand either.
So this person has an IVA and is 2 years into paying this. They live in a rented house, but also own a house that they rent out. They have received a tax bill from HMRC for just over £2500 of unpaid tax on the house they own. I'm assuming this is from renting it out? (I'm sorry, I'm really naive about this stuff!). I'm not sure why my friend did not sort their taxes out and pay them, but there we are! Anyway, they received this about 6 weeks ago, and claim they've contacted HMRC several times to explain they are not able to pay that amount in one go, but said that HMRC have basically not given any advice and just told him that it needs paying and it cannot be paid in instalments. He has now received another letter today from them threatening court action and another £1000 on top.
As far as I know, he hasn't contact the people who deal with his IVA to inform them of this bill but I've recommended he does. HMRC aren't one of the creditors named under his IVA though.

My question really is about whether there is anything that can be done? Is it correct that HMRC don't allow payments in instalments and if so if he doesn't pay because he literally has nothing then what happens next? Also, do HMRC not take into consideration the fact theres an IVA already in place?

Any answers would be very kindly received...thanks! x

sourcrates

Hi,


Unfortunatly HMRC are a law unto themselves, tax is payable on demand, although it would not be unreasonable for him to pay in installments, they may not allow it, its not unknown for them to make you bankrupt for no other reason other than they can.

The threat of legal action may not be the poisoned chalice you may think it is, a court judgement can be paid at a rate affordable to the debtor, he would have to swallow the legal costs, but at least its a viable option, so that may be his best hope to be honest.

2021para

Thank you very much sourcrates

fatbelly

They won't go for bankruptcy as he does not owe enough.

Though a question I don't know the answer to is whether a current IVA protects someone from a statutory demand.

County Court action is a possibility, as are field agents.

I think it may be possible to add it to the IVA. If the debt is less than 10% of the total already included in the IVA, the Insolvency Practitioner should simply be able to add it. However if the debt is larger than 10%, a formal variation of the Arrangement may be required.