Given 3 months to pay 28k by HMRC

fatbelly

la531983 said:

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?

Yes they do, and that may be the only way forward here. See what Business Debtline say. Maybe also try

https://taxaid.org.uk/

DigSunPap

I have just began self-employed work and I need to declare my tax. Sorry to hear about your bill hopefully you can set up a payment plan with them. I am going to do a self-assessment next week.

Keep_pedalling

In this case HMRC could take the line that the OP has actively avoided paying the outstanding tax as they were in a position to pay but purchased another house instead. If they do then I would be worried that they may petition for bankruptcy.  

https://taxaid.org.uk/guides/taxpayers/tax-debt/bankruptcy#:~:text=HMRC%20can%20petition%20for%20bankruptcy,10%25%20are%20petitioned%20by%20HMRC.

EssexHebridean

DigSunPap said:

I have just began self-employed work and I need to declare my tax. Sorry to hear about your bill hopefully you can set up a payment plan with them. I am going to do a self-assessment next week.

While not wanting to hijack the OP's thread, I will chip in here with the strong recommendation that from day 1 of your self employment you ensure you ALWAYS take off from any income the amount that will be due to cover income tax, NI and VAT, if any. Also ensure that anything you need to budget for - for example - accountants fees etc is taken account of.  The money owed to HMRC should be put into a savings account paying interest at the best rate you can get while still being able to access the money when needed. It should then be considered as "not your money" for any purposes other than that for which is is earmarked. 

TheAble

EssexHebridean said:

DigSunPap said:

I have just began self-employed work and I need to declare my tax. Sorry to hear about your bill hopefully you can set up a payment plan with them. I am going to do a self-assessment next week.

While not wanting to hijack the OP's thread, I will chip in here with the strong recommendation that from day 1 of your self employment you ensure you ALWAYS take off from any income the amount that will be due to cover income tax, NI and VAT, if any. Also ensure that anything you need to budget for - for example - accountants fees etc is taken account of.  The money owed to HMRC should be put into a savings account paying interest at the best rate you can get while still being able to access the money when needed. It should then be considered as "not your money" for any purposes other than that for which is is earmarked. 

Sound advice EH. Along with scrupulous record-keeping and filing in good time. Takes the stress out of it.

DigSunPap

EssexHebridean said:

DigSunPap said:

I have just began self-employed work and I need to declare my tax. Sorry to hear about your bill hopefully you can set up a payment plan with them. I am going to do a self-assessment next week.

While not wanting to hijack the OP's thread, I will chip in here with the strong recommendation that from day 1 of your self employment you ensure you ALWAYS take off from any income the amount that will be due to cover income tax, NI and VAT, if any. Also ensure that anything you need to budget for - for example - accountants fees etc is taken account of.  The money owed to HMRC should be put into a savings account paying interest at the best rate you can get while still being able to access the money when needed. It should then be considered as "not your money" for any purposes other than that for which is is earmarked. 

Thanks for the tip. Going to put 20% of each payment I have aside just to be safe.

threelegcat

Just a bit of a n update. I ended up calling HMRC and the person on the phone told me that some of the information given to me on this house call was incorrect. I CAN set up a payment plan as long as I make some sort of payment immediately. The 3 months threat was only if I didn't do anything at all, which is not what the person at the door told me. So I made a payment of 1k and set up a payment plan. The person on the phone was helpful and even asked what I could afford to pay monthly and set up a review in 6 months time. At least I am not panicking anymore, yes I still have to sort this out and I have an extra monthly payment that I need to cover on top of everything else. But I still intend to sell the house in spring and clear this debt completely. 

Great advice about putting 20% of any income away. I need to make this a 'no exceptions' habit! 

Hoenir

threelegcat said:

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. 

Rather than an idea make it an actual plan. Something you can offer the HMRC as a commitment to discharge the debt. As they've direct access to Land Registry records they know you've bought the property. 

DigSunPap

threelegcat said:

Just a bit of a n update. I ended up calling HMRC and the person on the phone told me that some of the information given to me on this house call was incorrect. I CAN set up a payment plan as long as I make some sort of payment immediately. The 3 months threat was only if I didn't do anything at all, which is not what the person at the door told me. So I made a payment of 1k and set up a payment plan. The person on the phone was helpful and even asked what I could afford to pay monthly and set up a review in 6 months time. At least I am not panicking anymore, yes I still have to sort this out and I have an extra monthly payment that I need to cover on top of everything else. But I still intend to sell the house in spring and clear this debt completely. 

Great advice about putting 20% of any income away. I need to make this a 'no exceptions' habit! 

Exactly! Do it as soon as you get paid and just treat it as you would any other fixed outgoing.

LadyWithAPlan

Good news on the payment plan. I also echo ESSEX H.
 Every month I do a quick expenses of the month on paper (main categories such as office rent/bills/subscriptions plus any one-off items)  and subtract that from income and then put the tax aside. I put my tax money in my premium bonds as I am taxed on my interest but otherwise a high interest acct works.

Note if you are SE once you are at the BR tax threshold you will be paying 20% tax + Class 4 NI of 9% so effectively 29% and at HR Class 4 is 2% so 42%
There are loads of SE calculators online