HMRC Debt

timw7 · 23 May 2019 at 2:36PM

Hi

I have a debt with the HMRC regarding Tax Claims via Self Assessment, I have agreed an IVA with them to repay back monthly, however the amount I will pay over the next 5 years will not cover all of the debt, as such to recoup as much as possible the HMRC put a stipulation in the IVA agreement that I would sell my house within 12 months and inject the equity into the IVA fund, this was the only way they would agree to the IVA
I had no other alternative other than to unwilling accept, and as such my two young boys will be affected as they will like me have no where to live and will lose inherritance, it is also unlikely i could rent as the IVA will have a negative impact with landlords so myself and the children could become homeless, are HMRC allowed to do this both lawfully and ethically?

normanna · 23 May 2019 at 3:15PM

HMRC are already cutting you some slack as they could make you bankrupt and that is more costly. Unfortunately sounds like you owe a lot of money.

If you're talking ethically and morally - should you have ethically or morally underpaid your tax?

The tax man rightly wants everyone to pay the correct taxes and they will attempt to protect the public purse at all costs which they should.

I recommend you start looking to market your house in good time so HMRC don't bankrupt you if that is what you wish to avoid. I would make sure HMRC have not overvalued your equity position. Perhaps a family member/friend could help out with the equity value so you don't have to sell at all.

normanna · 23 May 2019 at 4:46PM

PS I've read elsewhere that private landlords may not vet financially the same as letting agencies so renting through option might be best. I've come across some threads on this subject on https://www.iva.co.uk or hopefully someone else will come along to give you guidance on this.

foxy-stoat · 23 May 2019 at 5:10PM

How much equity do you have in your home at the moment and how much did you owe the HMRC?

tom9112 · 28 May 2019 at 2:17AM

I feel bad for you timw7,

I end up being homeless in my BR and it's not a nice place to be.

2 ways to go with in this case imo:
1. File for homelessness help with CAB and your housing due to IVA
2. Fight a legal battle with HMRC regarding your housing positions as you have 2 sons

As for "HMRC allowed to do this both lawfully and ethically?" they give you 12 months to find a new place and there is a plenty of help you can get before you have to sell your house.

JCS1 · 28 May 2019 at 1:07PM

With hindsight, you should not have agreed to the IVA if you did not agree with the terms.

How much do you owe, and how much equity is in the property?

dave1968 · 29 May 2019 at 10:46PM

Hmrc are a full law unto themselves and getting them to agree to the IVA at all is something. They are one of the quickest to file for Bankruptcy even if just as a way to stop debt increasing. I have just gone through 12 months of sheer hell in avoiding BK with them.Had to pay allot of money. 10s of 1000s. Which I finally did, but it meant a total life style change and working every hour under the sun.

They were hard as nails the first 7 months reminding me BK awaits if I miss just one payment. Then they eased of as they saw regular payments regular communication and the debt coming down.

Thing is you have it seems already agreed to the IVA so getting them to change the deal now would be very hard going. Also depends on the level of debt you have to them. Can they do this ethically and legally ? yes they can and HMRC dont deal with ethics just the letter of the law and making sure tax is paid and if not paid making sure no more debt is incurred.

You maybe better of using the 12 months to secure a place to live which even with bad credit ratings totally doable. I went the private landlord route and have the worst credit rating in the whole of the UK. Found a lovely place to live. I used an online company called Open Rent where its pretty easy to get direct contact with the landlord and no mad agency fees. So totally doable so long as you have deposits and first months rent etc.

Wishing you the best with this HMRC are the toughest I have ever dealt with, but not impossible.

Kentish_Dave · 30 May 2019 at 3:49PM

Legally and morally, yes, absolutely they are right to do this.

Morally there is no possible justification for you to fail to pay all that you can in order to give your children an inheritance.

Remember, the tax man is not taking it from them, you did when you spent it.

TripleH · 31 May 2019 at 4:35PM

When it comes to money, HMRC are pains.

As they see it, if you generate a tax liability, then that money belongs to HMRC full stop end of.
It is irrelevant to them that you might have to delay paying that money when it's due in the short term to ensure you are able to continue making payments to them in the long term. That is not how our tax system operates.

At the end of the day, if you go to HMRC with issues before the amount/s are due, they are usually quite good at coming to an arrangement, but if you are late paying they are absolute pains. As dave1968 states, if you make an arrangement to pay, they will ease off the pressure after a while if you show you are keeping to it, but they will come down hard if you are late paying.

ToxtethO'Grady · 1 June 2019 at 1:10AM

Can we pin this post about HMRC?

dave1968 · 3 June 2019 at 7:05PM

TripleH wrote: »

When it comes to money, HMRC are pains.

As they see it, if you generate a tax liability, then that money belongs to HMRC full stop end of.
It is irrelevant to them that you might have to delay paying that money when it's due in the short term to ensure you are able to continue making payments to them in the long term. That is not how our tax system operates.

At the end of the day, if you go to HMRC with issues before the amount/s are due, they are usually quite good at coming to an arrangement, but if you are late paying they are absolute pains. As dave1968 states, if you make an arrangement to pay, they will ease off the pressure after a while if you show you are keeping to it, but they will come down hard if you are late paying.

Very true TripleH, if you get to them early or before it is sent to debt recovery, then they are pretty good to deal with at the normal level. Which is exactly what I did NOT do. Hid under the covers until finally after a long time a man arrived and served me with a SD. That woke me up. But it could have been so much easier. I learned a steep lesson when it comes to HMRC. Any issues at all react fast and never ever ignore a letter from them ever!

When it gets to the Debt Recovery team its a whole new ball game and much tougher to get a deal in place. But not impossible. Keep in mind they wont do any TTP arrangements over 12 months usually. And even that is not a given. Unless you have some kind of assets that they can seize.

They will limit liability and way they explained it to me was making me BK would mean no more debt would be incurred , it was irrelivant to them the impact this would have had in my life.

One point to note if you have penalties it is worth appealing them all, I did and with certain mitigating circumstances got many of them written of. But it is alot of work and took months to work through. In the end HMRC is one debt no one should ignore ever. As they wont just go away.

These days if they are questions, or if I felt I would be getting into trouble with my tax I would call them instantly. But so far so good. Im paying up front from next month so never again I hope will I owe them. Communication is key here along with paying what you owe. Without that they will be brutal.

HMRC Debt

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