At wits end..... c.30K HMRC debt - no idea what to do...

Secret_Squirrel1970

This will be long, and may ramble, but my brain is in bits over this...  flicking from "it will all be fine", to  circling the drain of despair... i have also done a fair bit of 'ostrich approach' but sadly it isnt going away.

Arguably should have posted this a year (plus) ago and it could be in the HMRC section of the forum - but at this exact instant I don't have enough of the facts to hand, I am not at home currently and even if I was so much of the paperwork has yet to be uncovered or may have actually been lost in my move couple of months back.  So currently I do not have specifics - just the general gist..

Anyway, so I am starting here (Bankruptcy Debt section) and if it gets moderator moved (to HMRC) then that's obviously fine. 

The very very short version is I have somehow built up c. £30,000 in HMRC debt... The original figure was about £8,000  but time and fees have now increased this...  If there was a mechanism where it could be knocked back to close to the original missed payments(**-see below) and even some fees I would happily pay it off. But seems this is impossible, there is no mechanism or discretion for that..   So the amount plus frankly ridiculous interest and fees will just getting bigger and bigger until it is all paid off - which quite honestly seems impossible, hence me considering some debt programme, or bankruptcy. I don't know what the options are.

- a couple of things before I launch into this, up til 2020 I was with my wife who had serious ongoing, mental health problems. Psychosis, schizophrenia, delusions, serious self harm and multiple suicide attempts. So my mind was often mush. Our house had a revolving door for emergency services…

- I managed to keep working, mostly, (self employed) but my attention to matters was not what or where it should have been as I was busy trying to keep someone else alive. (There was scant help from the NHS they washed their hands of her as she was - paraphrasing - "too nuts for us").

- End of 2020 she finally completed what she had so often tried. 2021 when I wasn't working I was mainly dealing with inquest stuff and trying to get NHS to accept some of the blame.

That is by way of very very brief background.

** (see above) -  Where the debt originated - as far as I can understand it there was a period - say 2015-2020 where I missed the secondary, July, paying it forward payments. I paid my January taxes, and I got the SEISS payments in 2020, so this obviously wasn't noted then.. I even had a much bigger bill in 2021/2 as SEISS was taxable. So I had a tax bill then of around £7,000 one year, which I paid. In my mush brain - with all I was dealing with - I convinced myself those July/pay it ahead payments were voluntary. (don't ask me how - I wasn't thinking straight myself). And for whatever reason my accountant - who was in my tax portal once or twice a year - never noticed, and HMRC didn't mention it when I applied for and received the SEISS payments (2 of the 5 available). So then rather out of the blue I got notice that they now want £23K

*************

Back in Jan 2024 when doing my figures to send to accountant I asked them to check into a matter... I had been contacted by a couple of dodgy debt collectors via text purporting to be collecting on behalf of HMRC . My phone flagged them as likely Spam/scammers.

This was the first I had heard of it.

Turns out HMRC were after me for £23,000 or thereabouts... 😱

I had not heard anything about it. (I think they had been using my business website address, which does exist but I had told them not to as it's not an office, it's just an address).

And it hadn't been showing on my tax portal before then either. (I don't even have the log in to my tax portal I gave that over to accountant and they are in it once or twice a year. They tell me what I am due and I send it direct to the relevant HMRC account).

I wrote a letter to HMRC basically asking w.t.f - pointing out I hadn't heard of this - Neither by letter or via portal ... and telling them (again) to use my home address.

Also pointed out that I received some SEISS payments ( at start of COVID) and one of the criteria for that was to be in good standing with HMRC and paid up etc - so as far as I was aware summer of 2020 I was all good and up to date.

Took them almost a year to reply, the initial reply was just the print out of my tax portal, and  showing the amount, which was then up to £27,000 with further interest/fees (I kept meaning to reply and ask for them to actually answer the points I had raised but never got to it).

Took until summer of 2025 when I got a letter that detailed some replies... At much the same time I was given two months notice/no fault eviction.

So my priority became finding a new house for myself and step-daughter, the step-daughter I took on after the state so was damn useless at looking after her mother.

With gaps where I have known this was on the back burners but buried my head in the sand, been in denial.... That brings us more or less up to date in a very glib fashion.

I had kept not addressing it - part ostrich approach, part too busy with rest of life and latterly (recently)  trying not to end up homeless.

Also I kept telling myself for all they fire out computer generated letters there is still humanity within HMRC and once I got to a relevant real person and described what it's like holding down life whilst dealing with someone suffering psychosis and repeated self harm and suicide - well, then they would understand, would roll it back to the original amount and maybe some fees and charges. I would then set up payment plan and all would be okay.

But seems - from hearsay - that is an absolute pipe dream....  The amount as it stands now will just keep growing and growing daily. 

Seems short sighted and counter productive if you ask me.... I have no assets, I am not living high on the hog. This approach they risk getting nothing.

I rent, have never owned property. No ISAs, investments or anything like that. I am what I think Theresa May called JAMI (just about making it)/Just about managing. 

Now this HMRC amount ignored - I am surviving - two bedroom, privately rented house - step daughter currently with me (chipping in on rent)...  I have a credit card, currently under half its limit and being whittled down.  7.5k limit, outstanding balance 3.5 ish), I have a vehicle (which is work essential - I work in my car/from my car). No car, no work.   I can manage the car payments and all the usual bills etc. But I am not jetting about the globe living the high life - i get by, thats it.

The only bugbear is the HMRC amount.   And if "they" were realistic and took it back to the 8,000/9,000 that was the original amount missed, and maybe added a few thousand on, say to 15k - i could probably pay them back in a payment plan.

But the 30k and with more being added on all the time until its cleared, there is absolutely no chance. Their fees, charges and the amounts and times they add them on its like a punitive, scorched earth type thing… Surely it is counter-productive - it ruins citizens lives and may push them to where they get nothing back.

I don't know,...  to be honest I am jumping gun looking at such drastic debt relief when am not currently in touch with HMRC or the debt collectors they employed. 

is there a way out of this (arguably self-created) hell...?

cbsexec

you can appeal citing all of the above. They may reduce back to the original amount if you are lucky. Explain that you tried to keep on top of payments but due to all that was happening etc etc. don’t believe people who say HMRC won’t do it. I know they do so good luck

Secret_Squirrel1970

https://forums.moneysavingexpert.com/discussion/comment/81857497#Comment_81857497

Good to know…. I don't imagine it is common place but I hold out hope that somewhere there is some level of understanding in there. They cant all be automatons. I wouldn't even mind if there were some fees/charges, smaller punitive amounts and a reasonable payment plan. It would be do-able, they win/ I win. If they keep pushing I just see that both they and I lose.

Secret_Squirrel1970

Well a job I was on today was cancelled so going to put the time to good use - going to contact National Debt Helpline, and also try to get through to HMRC (although given the time of year that may be less than fruitful)…

ManyWays

National Debt Helpline - do you mean National Debtine on 0808 808 4444? There are some firms that should be avoided that try to sound like National Debtline.

But you would do better to call National Debtline's sister service, Business Debtline. This covers personal and business debts for the self emplyed or people with small limited companies. https://businessdebtline.org/

Tax Aid are also excellent. I can't tell if you qualify for help with them but they are worth a call https://taxaid.org.uk/i-need-help-with-tax

Secret_Squirrel1970

https://forums.moneysavingexpert.com/discussion/comment/81857836#Comment_81857836

Cheers, am sat at laptop now - about to put together my checklist of To Do, stuff to tackle today - cause of course have to have that last little bit of prevarication before pulling on the big, adult pants and actually tackling any of this …

I meant - https://nationaldebtline.org, yes…

I had seen Business DebtLline briefly somewhere but wasnt sure i would be applicable as sole-trader, but will give them a look.

Had seen TaxAid also but wasnt sure I would fit their criteria, but they are also on my list.

Isthisforreal99

What's not clear, to me anyway, is

1. Is the business still continuing and
2. Are your tax returns up to date.

Secret_Squirrel1970

https://forums.moneysavingexpert.com/discussion/comment/81858437#Comment_81858437

I am on hold to HMRC at the moment…. cause what is not clear to me is what this all actually is (i know it pre-dates 2020) and why it took them til end of 2023/start of 2024 to find this and start chasing me.

Yes, I have been a bit of an ostrich with it, (partly just disbelief and thinking it was a mistake), then told myself after all the mental health trauma stuff I was dealing with they would be able to wind it back to lesser amount I could deal with.. and partly just good old fashioned denial.

I believe it is (from what accountants said after looking at my portal) old missed July payments. With then so many fees and penalties it is a barely recognisable figure.

But yes to answer your questions..

1. I am still operating in same fashion as sole trader
2. and since 2020 everything is filed and up to date. Have just sent in my figures due now Jan 2026, and will pay what's due tomorrow. My current operating, day to business and life costs are fine… Just the current figure from them is totally insurmountable.

2020 is the watershed as it were because my wife finally succeeded in what she had been attempting for years, so I eventually was able to focus. Yet also because – and this is what mystifies me – I received the SEISS grants for covid (and subsequently paid back the tax on them). A key criteria to qualify was that you had to be up to date and in good standing with HMRC to qualify.

Isthisforreal99

Are you 100% sure the returns were actually submitted to HMRC.

Just that I'm thinking they haven't and HMRC have issued determinations in their absence.

Are you able to see historical statements in your online account, or view your Tax Returns?

Secret_Squirrel1970

Well it seems you are sort of echoing what I thought when I first heard about this…. that all my payments had gone wrong/awry. I checked - I send them from my one back account direct to HMRC Cumbernauld.. all the account details and ref/UTR etc were correct. I only could only access bank records/statements back a few years but they were all fine. If I really need to look into that I will need to order all the relevant copies.

I then wondered if there was a double/doppelganger record somehow, and it was where the errors were coming from..

When I went self-employed and set this up I was - and I cant stress this enough - dealing with hell at home…. The ongoing self-harm, psychosis and suicide were constant, interspersed with little seas of normality. SO I basically passed access to my tax portal to my accountant.. Each January I send them the figures, they put in in a nice spread sheet and file it - tell me what I am due, I then send it direct to HMRC Cumbernauld.

Short version - this is one reason why I am on phone to HMRC to get it from horses mouth. I am not sure of my portal password etc… I could get it, but am taking the telephone option. Only about 15-20 mins left on hold and I should get some idea exactly how high the cliff ledge I am on is..

Secret_Squirrel1970

Okay, off phone....

1. HMRC woman was very nice and very helpful. Not at all antagonistic or judgy.

2. I do feel better having started this process and contact..

3. The problem is - in some ways so much worse than I thought. I was right about the figure (30k), which is just what I had thought it would be based on it being 23K in Jan 2024.

BUT my accountant firm are - seemingly less than useless... A) this problem has been clearly showing on my tax portal since around 2017.

B) when it did finally show up, to me I mean, (very end of 2023/start of 2024) I specifically asked my accountant, that historic debt is sidelined, in its own little independent bubble and I can address it when I can... And my current payments are going on current due taxes at any point in time. They said yes. Turns out they were talking out their backside. So, despite all my payments in January and July all the years back matching the amounts due at those times - they just went into this black pit of old charges, fees, penalties etc.

So, bottom line I am still due HMRC 30k most of which is due to penalties and charges...

But she is putting me onto the Specialist Debt Management Team - have to call them tomorrow... And within that there is a sub-section that deals with vulnerable cases who may be able to help. Not so much my own vulnerability but the fact that this all came about when I was essentially a carer to someone with huge issues and this all started with the knock on from that... so maybe indirectly it was my vulnerability back then (?)

Tomorrow the debt management people can make sure the tax payment I will make tomorrow will go against the relevant current taxes.

They can the try to unpick and rematch my payments from the black pit of penalties and total debt and put it against the relevant more recent taxes - how far back they can, and/or are willing to do that is an unknown.

But I do feel a light, very faint at end of tunnel just even from the contact with them.

I am a long way from out of the woods but I feel I may have the first page of a map.

• So one reason I was unaware of this is still baffling, my accountant could see it - why was it never told to me...
• And even the HMRC woman couldn't answer why I received the COVID grants in 2020 - because you had to be in good standing and paid up to date. But the fact I got them reinforced with me everything was fine.