Given 3 months to pay 28k by HMRC

threelegcat

Hi Everyone,

New here and panicking. I know this is my own fault of burying my head in the sand. I am self-employed and over the years have racked up 28K debt with the HMRC. Today someone knocked on my door to talk to me about the money I owe. She was nice enough but was firm that I have a maximum of 3 months to pay in full. I had perviously had a payment plan but she told me I cannot have another one and that this needs to be paid immediately. 

A bit about my situation. I bought a house last year with some inheritance money, I am doing it up with the idea of selling in spring next year. I have work coming in but my industry is going through a quiet time especially as it is weather and seasons dependent. I have been living out my overdraft for quite a few months now. I pay my bills and mortgage on time. Apart from this debt no other and no credit cards or finance anywhere else. 

What do I do!? Who do I talk to!? 

Any help welcome. I am stressing out and panicking. 

Brie

If you don't have the money you don't have the money so can't pay.  Tell them that, try to negotiate a better time scale.  Sell things.  Was the person knocking on your door actually from HMRC?  I didn't know they did "house calls".  Or has the debt already been passed to a collection agency?

Talking to a debt adviser might help, assuming this is all legit.  Many creditors, including government departments, take more notice if a request for a sensible repayment plan is coming from an accrediated agency.  StepChange, NationalDebtLine, Citizens' Advice, Community Money Advisers (CMA) via a local food bank or the CMA Hub.  Not all advise on self employed debt so you might need to ring around.

jlfrs01

Despite being told you can't have another payment plan it is still worth making a formal application as this would be the least disruptive and cheapest solution. It may help to make an interim payment to show them you mean business. If the answer is "no" then I guess it'll be a loan and if that's not workable then doing up your property pronto to sell it to settle this debt is probably next in line. HMRC is pretty powerful and can take money from bank accounts and take assets to recover what they're owed so it's probably wisest to clear this rather than ignore it.

Keep_pedalling

Brie said:

If you don't have the money you don't have the money so can't pay.  Tell them that, try to negotiate a better time scale.  Sell things.  Was the person knocking on your door actually from HMRC?  I didn't know they did "house calls".  Or has the debt already been passed to a collection agency?

Talking to a debt adviser might help, assuming this is all legit.  Many creditors, including government departments, take more notice if a request for a sensible repayment plan is coming from an accrediated agency.  StepChange, NationalDebtLine, Citizens' Advice, Community Money Advisers (CMA) via a local food bank or the CMA Hub.  Not all advise on self employed debt so you might need to ring around.

But the OP does have a significant asset that they purchased rather than pay off the debt, so they may not be too willing to extend the payment plan now that they can force a sale on the recently purchased property. 

MeteredOut

Keep_pedalling said:

Brie said:

If you don't have the money you don't have the money so can't pay.  Tell them that, try to negotiate a better time scale.  Sell things.  Was the person knocking on your door actually from HMRC?  I didn't know they did "house calls".  Or has the debt already been passed to a collection agency?

Talking to a debt adviser might help, assuming this is all legit.  Many creditors, including government departments, take more notice if a request for a sensible repayment plan is coming from an accrediated agency.  StepChange, NationalDebtLine, Citizens' Advice, Community Money Advisers (CMA) via a local food bank or the CMA Hub.  Not all advise on self employed debt so you might need to ring around.

But the OP does have a significant asset that they purchased rather than pay off the debt, so they may not be too willing to extend the payment plan now that they can force a sale on the recently purchased property. 

I wonder if it was the house purchase (stamp duty payment linked to overdue account) that triggered the more recent change in stance from HMRC...

threelegcat

Brie said:

If you don't have the money you don't have the money so can't pay.  Tell them that, try to negotiate a better time scale.  Sell things.  Was the person knocking on your door actually from HMRC?  I didn't know they did "house calls".  Or has the debt already been passed to a collection agency?

Talking to a debt adviser might help, assuming this is all legit.  Many creditors, including government departments, take more notice if a request for a sensible repayment plan is coming from an accrediated agency.  StepChange, NationalDebtLine, Citizens' Advice, Community Money Advisers (CMA) via a local food bank or the CMA Hub.  Not all advise on self employed debt so you might need to ring around.

I didn't know they did house calls either, I was quite shocked! 

I have just called Citizens Adivice but like you said they don't deal with Self-employed. I will try the others. 

la531983

Three months takes us until Feb, you want to sell it in the spring. Surely by the time the 3 months is up the house will almost be on the market anyway?

jlfrs01

Brie said:

Was the person knocking on your door actually from HMRC?  I didn't know they did "house calls".  Or has the debt already been passed to a collection agency?

HMRC's debt collection arm is called "Field Force" and they do make unarranged, surprise visits to businesses, not individuals. This could make sense in this case as the OP is self-employed. More details here:

https://www.realbusinessrescue.co.uk/tax-hmrc/what-is-a-hmrc-field-force-officer-and-what-are-their-rights

zedonk

threelegcat said:
I have just called Citizens Adivice but like you said they don't deal with Self-employed. I will try the others. 

I think Business Debt Line is the main one for self-employed people (even if the debts are personal). 

EssexHebridean

la531983 said:

Three months takes us until Feb, you want to sell it in the spring. Surely by the time the 3 months is up the house will almost be on the market anyway?

"On the market" and "completed and funds received" are two different things though - it could easily be a further 6 months from it going on the market before the money is available to clear the debt.

la531983

EssexHebridean said:

la531983 said:

Three months takes us until Feb, you want to sell it in the spring. Surely by the time the 3 months is up the house will almost be on the market anyway?

"On the market" and "completed and funds received" are two different things though - it could easily be a further 6 months from it going on the market before the money is available to clear the debt.

Indeed, they could put a charge on said property or do HMRC not roll that way?