Overwhelmed by fear (and debt).

beeteecee

I’m paralysed by fear.

I have an IVA since 2022 and have been making payments but I have ongoing issues with the HMRC.

I’m very very anxious and worried that the authorities will think I have intentionally not managed my debt despite awaiting essentials from HMRC (a new UTR for eg as I am self-employed and they have not issued a new UTR so will not let me submit my tax return for 22/23)…

Come January 31 I will owe the tax for 22/23 and I won't have it available, I am trying to save it but the cost of living, single income household have all worked against me. It's an awful excuse to have just "not saved it" but I had hoped to pay money monthly into my HMRC tax account but due to not receiving my UTR this hasn't happened, I know there is no excuse for this, I spent a long time deciding re the IVA and did not think I'd end up in the same mess again come January. 

I have a significant self-assessment tax debt…very very high (currently “captured” in my IVA)… is this likely to mean I would make payments beyond 3 years if I were to consider bankruptcy?

I have seen there can be a very long BRO for a high tax debt and I am terrified of this so am trying to make the IVA work…Thank you for any advice

sourcrates

How much is this tax bill likely to be, do you know?

Ideally you should contact HMRC before it becomes due, and let them know you can`t pay it.

Payment arrangements lasting up to 12 months can be made online, from your online tax account, if its going to take longer than that to repay, you will need to speak to them.

Any arrangement longer than 12 months is entirely at their discretion.

If you can`t come to an accommodation, the vast majority of the time HMRC just farm your debt out to a debt collection agency, who you can make payments to of whatever you can afford, over a period of time normally much longer than HMRC would agree to.

So really there`s no need to be stressed, I`m sure you will be able to work something out with one or other of them.

beeteecee

Hi @sourcrates thank you for your reply - I imagine it will be £11k+ but I am not 100% sure - I am awaiting a reply from my accountant.

Due to being in the IVA I believed I would not be allowed to have another liability, is it possible this is not the case and I will have time to pay? My IVA company said they would be forced to petition to my bankruptcy if I did not pay in January...

Thank you for your response and level-headedness, believe me it's very much needed at the moment! 

fatbelly

beeteecee said:

Due to being in the IVA I believed I would not be allowed to have another liability, is it possible this is not the case and I will have time to pay? My IVA company said they would be forced to petition to my bankruptcy if I did not pay in January...

That hardly ever happens.

Would it be a disaster if it did?

beeteecee

fatbelly said:

beeteecee said:

Due to being in the IVA I believed I would not be allowed to have another liability, is it possible this is not the case and I will have time to pay? My IVA company said they would be forced to petition to my bankruptcy if I did not pay in January...

That hardly ever happens.

Would it be a disaster if it did?

Hey - I would rather get to the end of the 6 years and have got myself back on a level pegging than this last almost 2 years of IVA having been for nothing but I'm not sure how much room there is for me to sort this out - I believe I can pay the monies owed but it won't be by Jan 31.

fatbelly

So when the tax bill arrives, talk to hmrc about an instalment arrangement. Until then , there's no problem is there?

beeteecee

fatbelly said:

So when the tax bill arrives, talk to hmrc about an instalment arrangement. Until then , there's no problem is there?

I hope you're right, it would mean I am panicking over nothing (yet) which is a lifelong habit - I was just under the belief that come January, due the "live" IVA for previous years' tax debt amongst other things, I would not be allowed to have any further arrangement. Maybe it's been scare mongering on the part of my IVA company and maybe things will be OK...?

sourcrates

IVA companies are on a par with money lenders and debt collectors, they all drink from the same well.

Bankruptcy is a potential event if an IVA fails, but hardly ever happens that way.

Tax would be a priority debt anyway, do some research, there are standard protocols in place to repay it over time.

Average IVA failure rate is around 35%, they can`t make em all bankrupt can they !!!

beeteecee

sourcrates said:

IVA companies are on a par with money lenders and debt collectors, they all drink from the same well.

Bankruptcy is a potential event if an IVA fails, but hardly ever happens that way.

Tax would be a priority debt anyway, do some research, there are standard protocols in place to repay it over time.

Thank you again, I believed that my previous tax debt would be a problem if I ended up owing anything again and it would immediately result in a bankruptcy petition.

I will do all I can to get it sorted by Jan 31 but if not, there is hope the HMRC may allow me to come to some arrangement? 

fatbelly

Problems only occur if you ignore hmrc.

https://taxaid.org.uk/guides/taxpayers/tax-debt/time

beeteecee

fatbelly said:

Problems only occur if you ignore hmrc.

LINK

Absolutely, I will speak to them as soon as I'm able to file my return (another issue as awaiting the means to do this from them) - I just thought due to my IVA and debts owed to them within that, that I had no hope going forward. As the link says: 

"If you have a self assessment debt you can set up a payment plan online and pay the debt in instalments without the need to contact HMRC provided:

• The debt is £30,000 or less.

• You do not have other payment plans or debts with HMRC.

• Your tax returns are up to date and it is less than 60 days since the payment deadline."

I fear I may still be in a sticky mess but I won't know until the moment arises. Thank you for your thoughts and guidance.