Loan to pay HMRC

JayJSeymour

Hi all.

I am overdue £49k income tax.

I am due other debts and am on a payment plan to RBS. They have placed default on my credit file - credit score is around 535.

I need to get a loan to pay off as much of the £49k as possible asap. I earn £110k, my wife £125k. I am 50 years old.

I have c.45k equity in property - £370k mortgage, property value £415k. Jointly owned.

It is a condition of my worker status that if I am declared bankrupt I cant work in this sector anymore.

1. I presume I am going to be credit scored out of a personal loan of any kind of decent amount/interest rate?

2. Is there any secured loan provider that could provide a secured loan over property up to 100% LTV?

3. Is there any reliable lender that would provide a loan secured to my pension? You can tell me "dont do it" but I need to know all options.

I have called HMRC to try and get a payment plan. Advisor told me to apply online as she knew what I was asking for would get rejected if she referred it. I am looking for two years minimum to pay. I was self employed am now employed - this will not be a recurring issue in future tax years.

Any info appreciated.

born_again

JayJSeymour said:

Hi all.

I am overdue £49k income tax.

I am due other debts and am on a payment plan to RBS. They have placed default on my credit file - credit score is around 535.

I need to get a loan to pay off as much of the £49k as possible asap. I earn £110k, my wife £125k. I am 50 years old.

I have c.45k equity in property - £370k mortgage, property value £415k. Jointly owned.

It is a condition of my worker status that if I am declared bankrupt I cant work in this sector anymore.

1. I presume I am going to be credit scored out of a personal loan of any kind of decent amount/interest rate?

2. Is there any secured loan provider that could provide a secured loan over property up to 100% LTV?

3. Is there any reliable lender that would provide a loan secured to my pension? You can tell me "dont do it" but I need to know all options.

I have called HMRC to try and get a payment plan. Advisor told me to apply online as she knew what I was asking for would get rejected if she referred it. I am looking for two years minimum to pay. I was self employed am now employed - this will not be a recurring issue in future tax years.

Any info appreciated.

Credit score means noting.
Default means everything.
You might be able to get a secured loan/mortgage on property. But rate will not be good, given default. As secured you are putting yourself in danger of losing the property if you can't afford this.

In reality you need to do a SOA. Given a combined income of £235k & not being able to pay the debt. 

This would be better in debt section, as a loan is not really the answer to your problem, it will only make it worse.

JayJSeymour

Thanks - I will pop this in debt section.

JayJSeymour

Hi all.

I posted this on Loans category but was advised to put it in the debt section - I am not sure if this is now the right place?

I am overdue £49k income tax.

I am due other debts and am on a payment plan to RBS. They have placed default on my credit file - credit score is around 535.

I need to get a loan to pay off as much of the £49k as possible asap. I earn £110k, my wife £125k. I am 50 years old.

I have c.45k equity in property - £370k mortgage, property value £415k. Jointly owned.

It is a condition of my worker status that if I am declared bankrupt (or any other form of Personal Insolvency) I cant work in this sector anymore. So none of my debts are paid and I end up unemployed, family not provided for etc

1. I presume I am going to be credit scored out of a personal loan of any kind of decent amount/interest rate?

2. Is there any secured loan provider that could provide a secured loan over property up to 100% LTV?

3. Is there any reliable lender that would provide a loan secured to my pension? You can tell me "dont do it" but I need to know all options.

I have called HMRC to try and get a payment plan. Advisor told me to apply online as she knew what I was asking for would get rejected if she referred it. I am looking for two years minimum to pay. I was self employed am now employed - this will not be a recurring issue in future tax years.

Any info appreciated.

Grumpelstiltskin

You cannot borrow your way out of debt, all you will be doing is moving it sideways.

Forget your credit score, its a made up number but how much is your total debt and how did the large amount of tax accrue, did you not save for tax whilst you were self employed?

With that amount of income you should be able to make big payments to HMRC, it may need you to seriously rethink your budget but HMRC are not to be messed with

Add   Start with this thread.

In Debt and Wannabe Debt Free? First Steps! — MoneySavingExpert Forum

Complete a SOA format for MSE and copy and paste on here then we can see the full situation.

fatbelly

I agree with the above. Rushing into a secured loan will just make things worse. Not that you have enough equity (fortunately)

Post the soa.

In the meantime continue talking to HMRC.

Do you agree that you owe 49k?

CliveOfIndia

Your score is meaningless, but a default will seriously hamper your ability to obtain credit.  Even without that, £50K is above the amount that most lenders would consider for an unsecured personal loan.

Do you have any high-value assets that could realistically be sold (a car, perhaps)?  I'm not being judgemental, but a combined salary of over quarter of a million is on the high side by anyone's standards - it's entirely possible that you've bought items of value that could be sold?

You could potentially look at re-mortgaging to release some equity.  The advice on these boards is always to avoid taking on secured debt, due the potential ramifications if you find yourself unable to service it.  But HMRC is one creditor that you do need to take seriously (unlike, for instance, unsecured debt such as a credit card - defaulting on those will ruin your credit history, but is not the end of the world in the grand scheme of things).

I guess the last resort option may be to sell the house and buy somewhere much cheaper.  Not a decision to be taken lightly, I fully appreciate, and that process would incur costs in itself.  But it's an option to bring to the table if all else fails.

Grumpy_chap

JayJSeymour said:

Thanks - I will pop this in debt section.

When you post in the Debt-free Wannabe section of the forum it will be helpful to get you positive suggestions if you prepare and share your SoA (Statement of Affairs).  Be sure to consider expenses (and not just income) as a couple.

I agree with others that a further loan, if available, will not help the overall financial situation in the long term.

Inn the short term, be sure to make at least minimum payments to all liabilities (loans, credit cards etc).

JayJSeymour

Thanks so far.

I didnt post the history behind this because I didnt want to clutter the post with my personal sob story - but the background position is I had a full mental breakdown last year. I wasnt an employee at the time and had no protections from the company i worked with so they asked me to leave. I had to spend their "exit package" - which included my tax otherwise due for this year - on surviving. I needed to pay some tax from the year before also.

My monthly overheads, london rent etc were ridiculous - I have now relocated to Scotland and basic accommodation costs have come down by 60% but the carnage from the last 18 months has left a big hole. 

We do have the income to service a loan to pay this off it is just about getting that loan - even to pay half of it off as a lump sum now.

I have two guaranteed "bonus" payments due in Sept and May 25 - of £10k and £8k (before tax).

JayJSeymour

When you say SOA - do you mean my HMRC statement of account?

We have no assets that do not have some form of credit. A car but with car finance outstanding. The house - we have tried to sell it twice but with no success. It was bought for £400k 17 years ago and is only worth £415k now. You could say we have been unlucky in that regard...

JayJSeymour

Ah ok - I wondered what SOA was. Ok - will do that, I don't have one yet so will need to put one together.