Debt Help IVA? DRO? PLEASE HELP

electrician81

Hi All
I owe a lot of money mainly to hmrc £30,000 for personal tax, I submitted a large return to be eligible for a mortgage.

also owe around another £20k in unsecured debts, van finance, credit cards etc and also behind on some council tax.
ive Been burying my head for some time but its all catching up now and I can't afford to make all the payment is simply dont earn enough, I cannot loose my house I am joint on a mortgage with my wife mortgage is £1800 per month which ive never missed a payment on. 

What options do I have? would an iva be suitable? im self employed. 

Any help would be greatly appreciated. 

Keep_pedalling

Do you mean you inflated your earnings on your tax return to qualify for a mortgage so now owe a large amount of tax on profit you never made?

electrician81

pretty much yes. I earned somewhere near there but not as much as I submitted, I had to otherwise bank wouldnt lend me enough money. needed a £400k mortgage im in south east. that's only a 3 bed semi. 

fatbelly

Hi. We might have to try to get this moved to the main dfw board but I can offer some comment for now

I think the key is not to leap into a strategy without thinking this through.

Three of the things you mention are priority (hmrc, mortgage, council tax), four if you need the van that's on finance.

You are keeping up with the mortgage.

Can you catch up with the council tax if you stop paying the non-priorities?

Do you agree that you owe hmrc 30k and have you talked to them about 'time to pay'?

In order to tease out what is best (and that's likely to be dmp or iva) eventually we will need you to do a statement of affairs. Please format for mse

https://www.lemonfool.co.uk/financecalculators/soa.php

electrician81

Hi
Thank you for your reply, can hmrc take my home from me if I can't pay what they want me too? basically they want me to pay nearly £900 per month for 3 years, I simply dont have that money but I can't loose my family home over it. im unsure if they have the power to take my home or not?

fatbelly

They are unlikely to escalate it while you are talking to them.

You know that if you made a 'mistake' on your tax return, you have 12 months to correct it?

In answer to your question, it's regarded as a priority debt mainly because they can use field agents (effectively bailiffs) without a court order. Ultimately they can petition for your bankruptcy, where all your assets become owned by the trustee in bankruptcy. So it's a sort of 'yes'

Do you have an accountant who helps you with your tax affairs? What are they suggesting?

electrician81

I Think ill offer £500 per month for now to keep them happy and look to up it in future if things improve. I can't risk loosing my house.

How likely are they to file for my bankruptcy? My wife is joint on. the mortgage so surely they can't do this can they?

electrician81

fatbelly said:

They are unlikely to escalate it while you are talking to them.

You know that if you made a 'mistake' on your tax return, you have 12 months to correct it?

In answer to your question, it's regarded as a priority debt mainly because they can use field agents (effectively bailiffs) without a court order. Ultimately they can petition for your bankruptcy, where all your assets become owned by the trustee in bankruptcy. So it's a sort of 'yes'

Do you have an accountant who helps you with your tax affairs? What are they suggesting?

this was my 2021-22 accounts so its too late now to adjust them surely?

fatbelly

Not likely. It's a last resort. Wife's assets not taken in your bankruptcy.

I've asked for the thread to be moved so more people can contribute.

fatbelly

electrician81 said:

fatbelly said:

Do you have an accountant who helps you with your tax affairs? What are they suggesting?

this was my 2021-22 accounts so its too late now to adjust them surely?

So you declared them in Jan 2023? 11 months ago?

Even if it's more than 12 months, mistakes can be rectified.

You are giving me the impression that you are not seeking professional advice on your tax affairs

fatbelly

In your situation I'd be talking to

An accountant

Business Debtline

https://www.businessdebtline.org/fact-sheet-library/income-tax-debt-ew/

Tax aid

https://taxaid.org.uk/