They're taking my business :-(

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  • System
    System Posts: 178,097 Community Admin
    Photogenic Name Dropper First Post
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    Was the website actually run as a business or a hobby? If it was run as a business, you registered as self employed doing it properly as a business then they wouldn't touch it. So for them to be taking it it suggests that you actually weren't. Did you declare the £20k you earned from it to anyone?

    If you ran it as a hobby and didn't declare the income because for whatever reason you thought you didn't have to then you're going to lose the site.
  • sortingmyshitout
    sortingmyshitout Posts: 25 Forumite
    edited 9 April 2018 at 10:40AM
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    So in the end I submitted an offer of £2500. The OR handed me over to an auctioneer that they'd been in touch with to try to value the business. He tried to haggle me up to £3500 (although he understood my position and thought it was a fair offer considering the ongoing work I have to put into the site to make it profitable) but I stood firm and have now (with the aid of my loving wife) bought the website back for £2500.
  • sortingmyshitout
    sortingmyshitout Posts: 25 Forumite
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    Tarambor wrote: »
    Was the website actually run as a business or a hobby? If it was run as a business, you registered as self employed doing it properly as a business then they wouldn't touch it. So for them to be taking it it suggests that you actually weren't. Did you declare the £20k you earned from it to anyone?

    If you ran it as a hobby and didn't declare the income because for whatever reason you thought you didn't have to then you're going to lose the site.

    I've never registered it as an actual business, I just run it in my self-employed capacity as a sole trader. I've not paid any tax on it for a number of years though; it always seemed too big a thing to deal with when I had overhanging debts to HMRC from years previously.

    I feel much better about myself and life in general now that I've made the step of declaring bankruptcy so that I feel I *can* start paying my taxes again!
  • System
    System Posts: 178,097 Community Admin
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    sortingmyshitout wrote: »
    I've never registered it as an actual business, I just run it in my self-employed capacity as a sole trader. I've not paid any tax on it for a number of years though; it always seemed too big a thing to deal with when I had overhanging debts to HMRC from years previously.

    I feel much better about myself and life in general now that I've made the step of declaring bankruptcy so that I feel I *can* start paying my taxes again!

    You need to contact the HMRC and explain. If you've generated £20k income a year and you've not been paying any tax on it via self assessment then you're committing tax evasion. The longer you leave it the more the penalties and interest on the amount due rack up. The amount up to the date you were declared bankrupt would be included in bankruptcy but from then on wouldn't be.
  • Potbellypig
    Potbellypig Posts: 775 Forumite
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    sortingmyshitout wrote: »
    I've made myself bankrupt, as it seemed the best way of dealing with my debts (mostly unpaid taxes, but also some credit cards etc from 6+ years ago). My total debts were on the order of £50k or so.

    I felt I was quite safe to do so, as I don't have any assets as such to speak of. I had a niggling doubt in my head that the website I run as my main source of income could be considered an asset, but I figured they would never want to take that away as it's MY MAIN SOURCE OF INCOME.

    After an hour's interview today the OR and I agreed that over 3 years I am to pay back a couple of hundred every month. Fine.

    He then dropped the bombshell via email that my website is now the property of the OR, and that I need to hand over the registration certificate for it and make "a reasonalbe offer" to buy it back from them.

    Obviously I have no money with which to buy it back. I think the implication is that I'm supposed to beg a friend/relation to buy it back for me. I understand why, they want to get some money out of me for my creditors, and this seems like a good way of them doing it.

    But I don't think I know anyone who would be in a position to make "a reasonable offer". How much are they going to want? It makes a profit of about £20k a year, which is why I've now applied for bankruptcy as I thought I was making enough money to stand on my own feet and pay taxes like a real person, if I could get a fresh start, which I thought was the point of a bankruptcy :-(

    Then there's this bit: "if we are not in receipt of a satisfactory offer the Official Receiver may consider closing the website or realising it for the benefit of creditors as they do not want to be liable for any costs associated with it."

    I'm of the opinion that without me the website is worth very little, as the admin system I've rigged together over the years is far from user-friendly, it'd need someone with a fairly unique combination of technical skills and interest in my niche to run it, and even then there would be a lot of work to be done to make it more usable by an outsider. And would they want to put in 12hr+ days every day to make £20k profit a year... probably not!

    So, any advice, what can I do?

    This website is a passion of mine, and also my income. I know I'm very fortunate that my job is something I LOVE doing, and maybe as a bankruptee I don't deserve to be that fortunate... but I really don't know what I'll do if they take it away from me. It's been my life for years, and aside from my wife is the only thing in the world that I care about even slightly :-(
    sortingmyshitout wrote: »
    I've never registered it as an actual business, I just run it in my self-employed capacity as a sole trader. I've not paid any tax on it for a number of years though; it always seemed too big a thing to deal with when I had overhanging debts to HMRC from years previously.

    I feel much better about myself and life in general now that I've made the step of declaring bankruptcy so that I feel I *can* start paying my taxes again!

    You haven't paid tax for years on, as you put it, ''YOUR MAIN SOURCE OF INCOME''. I wouldn't be worrying about the bankruptcy anymore. I'd be worrying about HMRC coming back to you on years of unpaid tax.

    Your arrogance is quite staggering, in all honesty.
  • sortingmyshitout
    sortingmyshitout Posts: 25 Forumite
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    Tarambor wrote: »
    You need to contact the HMRC and explain. If you've generated £20k income a year and you've not been paying any tax on it via self assessment then you're committing tax evasion. The longer you leave it the more the penalties and interest on the amount due rack up. The amount up to the date you were declared bankrupt would be included in bankruptcy but from then on wouldn't be.

    I submitted all of my historical tax returns before declaring my bankruptcy, and the man who arrived on my doorstep from HMRC that finally prompted me to sort my !!!! out knows this and knows I've opted for bankruptcy. So I think I'm ok there?
  • sortingmyshitout
    sortingmyshitout Posts: 25 Forumite
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    Potbellypig wrote: »
    You haven't paid tax for years on, as you put it, ''YOUR MAIN SOURCE OF INCOME''. I wouldn't be worrying about the bankruptcy anymore. I'd be worrying about HMRC coming back to you on years of unpaid tax.

    Your arrogance is quite staggering, in all honesty.

    See my last reply. Do you still think I need to be concerned? I don't think I'm betting arrogant at all, just trying to get my life back on track after some poor decisions many years ago :(
  • silvercar
    silvercar Posts: 46,999 Ambassador
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    sortingmyshitout wrote: »
    See my last reply. Do you still think I need to be concerned? I don't think I'm betting arrogant at all, just trying to get my life back on track after some poor decisions many years ago :(

    I think you are fine now. If you submitted tax returns for the dodgy years, hmrc can see that the tax was due and that it now falls into your bankruptcy.

    Going forward obviously you will be on their radar, so tax returns need to be accurate and verifiable.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • sortingmyshitout
    sortingmyshitout Posts: 25 Forumite
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    Certainly. I've spoken to the OR who has confirmed I have a nil tax code for 2017-2018, but that I will need to pay tax on income from April 2018 onwards. Savings account opened, first bit of tax money stuffed into it. I'm disconcertingly excited about saving money for a tax return and completing and paying it on time - although I guess that won't be until Jan 31st 2020, distant! (I know I'll have to submit one this year as well, just not one that I have to pay)
  • Potbellypig
    Potbellypig Posts: 775 Forumite
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    I must be missing something. You have earned £20k a year for years and not paid tax on it. How does this fall into your bankruptcy?
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