Bankruptcy & Tax debts/fines

Divorcing

Hi all

After a turbulent few years where I have just let things slide, due to numerous reasons that I do not really want to go into here, I will be going bankrupt.

I have not completed my self assessments for the last couple of years, I know this is unacceptable and not fair but as I said I have had a lot going on so I would be grateful if people would refrain from pointing out how bad I have been.

My questions relate to what I owe to the HMRC & quantifying the debt for bankruptcy.

1. Do I need to complete the assessments & submit them before issuing for bankruptcy, or
2. Can I complete the assessments after I have applied and add them to my bankrupcy, or
3. Will the HMRC just write me off and start a clean slate so to speak without the need for the assemssments.

Thank you for reading and thanks in advance for any help & advice.

thevdm

Hi, no judgement from me.


Although I don't know the definitive answer to your question I do know that you don't necesarily need to give the exact figures to put down for a debt in bankruptcy, so the self assessment may not be required to be completed.



If you are still required to complete self assessment (i.e. still self employed and intend to be so while bankrupt) then it may be required to do the self assessment upto the date that you go bankrupt so it is clear what tax is included and what tax isn't. There are also certain rules on bankruptcy while self employed; these mainly concern directors of limited companies, changing trading name and advertising that the self employed person is bankrupt.


I'm sure you've seen them, but here is the restrictions - https://www.gov.uk/bankruptcy/restrictions

MEM62

Are HMRC chasing you already? If so, what stage are the discussions at? They may actually make the decision to make you BR if they reach the conclusion that you cannot cover the tax debt.

Also, do you have any debts other than HMRC? And what about assets?

Flyright

Please be aware that failure to pay your tax and failure to keep adequate books and records are both grounds for a BRO.

Divorcing

Thank you for your replies.

@MEM62 they have sent me letters chasing and late penalty notices. They've not threatened to make me bankrupt or anything, just the notices.

Yes I have other debts, 30k+

MEM62

Divorcing wrote: »

Thank you for your replies.

@MEM62 they have sent me letters chasing and late penalty notices. They've not threatened to make me bankrupt or anything, just the notices.

Yes I have other debts, 30k+

OK, so HMRC could be some way off from forcing your bankruptcy. I would suggest that you speak to one of the debt charities to get an informed opinion on your situation. They will give you detailed information on what your options are but, if you have no assets to protect (house etc) then they may well recommend BR.

antonic

HMRC *usually* make people to protect the public purse.
If they determine that you dont have the assets to cover the cost of making you bankrupt they wont (its expensive for them to make people bankrupt).
File any outstanding returns and you may find that the amount you owe is less than the assessed amounts.

Bluecar2

I was in a similar sitution myself and yes HMRC will make you bankrupt whether you have assets or not ( I have none), with hindsight i would have made myself bankrupt and got it done and finished with because in my case it has dragged on for 2 years and has only happened 2 months ago, they are the most incompetent people you could ever wish to deal with, they postoned my court date 3 times as they failed to serve the summons correctly twice and failed to arrive at court with the correct paperwork( charging over £1000 a time for the privilege), you will also have to have a face to face interview rather than a telephone one, this lasted 3 1/2 hours in my case and a 120 mile round trip
Forgot to add that HMRC were quite adamant that all my tax affairs had to be up to date before thay applied for bankruptcy even though i had no way of paying the bill where as i dont think it matters if you just apply yourself

dave1968

HMRC will in the end make you bankrupt, they are harsh to deal with. I know just been through it the past 18 months but I ended up clearing the debt to avoid Bk. But they take a very harsh line with outstanding self assessment returns not filed. And you need to get these in no matter what as you do expose yourself to a HMRC internal investigation where they will then go through every aspect of your financial situation.



Before HMRC would even speak properly to me on anything they pushed hard for all SA to be upto date which in the end they were. If you just leave it they will go for BK as your debt is over 5k. But it could take a long while and you do as said expose yourself to the risk of being investigated.



Outstanding SA returns would be grounds for a BRO if filing for BK yourself. HMRC play hard ball in all cases with tax owed and even more so if you dont have your filing up to date as I learned myself at great cost.



GL with it all and no judgement from me - it happens.