Vat owed

wooody

Hi there, I’m really worried about my sister
She had a hairdressing business for over 30 years 
Due to the current COVID situation 
She has has to close her business 
She now has no income and is struggling 
To cope,
she has a VAT bill to pay approximately £40000
And has no money,she is currently using credit cards to buy food and pay other household bills
As far as I can make out she’s classed as a sole trader and not a limited company 
Is there any that this vat bill can cancelled 
Look forward to any response or advice you can give to me that could help her,

Thrugelmir

Are you sure that she owes £40k for VAT? 

Hasbeen

wooody said:

Hi there, I’m really worried about my sister
She had a hairdressing business for over 30 years 
Due to the current COVID situation 
She has has to close her business 
She now has no income and is struggling 
To cope,
she has a VAT bill to pay approximately £40000
And has no money,she is currently using credit cards to buy food and pay other household bills
As far as I can make out she’s classed as a sole trader and not a limited company 
Is there any that this vat bill can cancelled 
Look forward to any response or advice you can give to me that could help her,

On turnover of £200000?

MattMattMattUK

£40k is a hell of a VAT bill for a sole trader hairdresser, especially considering VAT paid quarterly, maybe check the amount and that the return has been completed correctly.

No the VAT bill can not be cancelled, she has already had the money from her clients and so owes that money to HMRC. 

calcotti

This comment not in response to the VAT question but you say she has no income. Has she used a benefit calculator to see if there is anything she can claim? https://www.gov.uk/benefits-calculators

MFdreamer

I agree that it would be unusual for your sister to have that high a VAT bill as a sole trader without an accountant.

That being said she should absolutely not stick her head in the sand and should call HMRC on their Covid helpline as soon as possible to explain her position and see what they say. They may be able to agree Time To Pay instalments.

Early, open and honest communication with HMRC is the key!

Hope it all works out. Terrible time to be a hairdresser 😢

macman

On a quarterly payment basis, that means a turnover of £0.8m! And still a sole trader?
If that VAT bill goes back a year, then she must have owed it prior to the first lockdown, so doesn't appear to be COVID-related?
Unfortunately, if she is a sole trader then she is personally liable for any debts and cannot just liquidate the business.
OP, you really need to get more detail and post full information.

wooody

Good morning to you all I will try and get more information and re post

thanks for reading and taking time to reply