Overdue taxes

scaredofthevatman

This is my first post but i am so glad to have found this site! I own a small business (sole trader) and have been getting into difficulties paying things on times. What has happened is that i have kept up with all my creditors, wages etc but not paid any VAT or PAYE. I know this was very stupid but i just kept blocking it out and not opening the letters/demands from them.

I have just calculated i owe £12,000 in VAT and probably about another £12,000 in PAYE/NI. I have profitable business but have only been trading for 24 months and although i have a turnover of £300K plus cannot borrow any more from the bank as i have no security.

I am going to phone the advice line tomorrow and see if i can arrange monthly payments to payoff the balance but have a feeling they are going to say no.

If they do i will have no option but to sell my business and i will be completely heartbroken as i have been working 100 hour weeks to make it work for the last 2 years and am finally seeing a way to make a profit.

Not sure if anyone else will have been in a similar situation but any advice would be appreciated.

Thanks

depressed_of_lincolnshire

scaredofthevatman wrote: »

This is my first post but i am so glad to have found this site! I own a small business (sole trader) and have been getting into difficulties paying things on times. What has happened is that i have kept up with all my creditors, wages etc but not paid any VAT or PAYE. I know this was very stupid but i just kept blocking it out and not opening the letters/demands from them.

I have just calculated i owe £12,000 in VAT and probably about another £12,000 in PAYE/NI. I have profitable business but have only been trading for 24 months and although i have a turnover of £300K plus cannot borrow any more from the bank as i have no security.

I am going to phone the advice line tomorrow and see if i can arrange monthly payments to payoff the balance but have a feeling they are going to say no.

If they do i will have no option but to sell my business and i will be completely heartbroken as i have been working 100 hour weeks to make it work for the last 2 years and am finally seeing a way to make a profit.

Not sure if anyone else will have been in a similar situation but any advice would be appreciated.

Thanks

then there isnt enough profit in the job. Vatman isnt the most friendly. In fact he is the one I always make sure gets paid. I just received a rollocking for being 2 days late with my return.

I am self employed and in the poo as well so I am sympathetic. Read about saving money - cutting overheads. Have a good long look at the business and see if you can save money. Most of all open your eyes and make usre you are profitable. The wise man is the one who stops it before it cripples you!!

Good luck

redkelly

I have just had problems with the V.A.T owed them £36,000 in back vat (not our fault) and have to say they were really helpful still have to pay in a very short time but the really did try and help.

scaredofthevatman

It is actually now making an okay profit but it wasn't for the first 18 months and therfore i have run into cashflow problems. I don't take anything out of the business at all and have cut other outgoings as much as possible.

Thanks for the advice though. I always think the worst but am pretty sure they aren't going to accept monthly payments. Well it looks like they open at 8am tomorrow so i'll just have to wait and see.

One other question. Am i better phoning myself or trying to get an accountant or debt agency to help??

depressed_of_lincolnshire

scaredofthevatman wrote: »

It is actually now making an okay profit but it wasn't for the first 18 months and therfore i have run into cashflow problems. I don't take anything out of the business at all and have cut other outgoings as much as possible.

Thanks for the advice though. I always think the worst but am pretty sure they aren't going to accept monthly payments. Well it looks like they open at 8am tomorrow so i'll just have to wait and see.

One other question. Am i better phoning myself or trying to get an accountant or debt agency to help??

I would talk with someone with expert knowledge first. Get advice.

I don't take anything out of the business at all and have cut other outgoings as much as possible.

then are you sure it is making money. It isnt turnover that makes a business good - its whats left at the end of the day.

redkelly

Go to the vat man with a plan about what you can afford...can I ask how much it is outstanding?

scaredofthevatman

Yes its just under £12,000.

redkelly

Sorry yes I can see it's £12,000 work out how much you could afford to pay this off , then phone the vat office they gave me a number of there debt management and we came to the arangement with them.
The only thing is they normally ask for a large deposit, and all you old vat returns have to be up to date and filed on time or they will not help.

scaredofthevatman

'then are you sure it is making money. It isnt turnover that makes a business good - its whats left at the end of the day.'

Yes it is definately making money. Not sure if i should admit this as it makes me look really stupid but i am actually trained as a chartered accountant so
I do all my financial statements and they are audited by an extrenal accountant and have a profit showing for this year but i didn't get a rates bill from the council for the first year as the property was in a new development and have had to make backdated payments for this meaning i have not had enough cash for the vat.

scaredofthevatman

Okay, i will offer a payment of £2000 now and then the additional £10,000 in monthly payments and see if they will accept that.
Thanks

redkelly

When I spoke to them they really didn't care what we were making in the business they just wanted their money!!! I was worried sick about it all and really didn't know which way to turn. But really was suprised when I spoke to them they were helpful (maybe I was just Lucky) but never leave the v.a.t they will always come after you and then fine you for not paying!!!!

Speak to them in the morning but without your v.a.t return they may not be much help just yet as it's not on the system.