HMRC threatening Bankruptcy

Danny1973 · 16 April 2018 at 1:44PM

Hi All,

I was visited last week by a HMRC Field Agent who demanded £13000 in unpaid Self Assessment Tax. There are many reasons why I fell behind in these payments however, one problem I had was trying to ascertain what my SA arrears stood at. Nobody in HMRC would confirm as the figures in the letters, didnt match the figure on my SA portal. Regardless she threatened bankruptcy and seizing of Assets (Cars, House etc) if I didnt pay.

I have tried to get them to accept an arrangement that would clear this within 6 months however, they seem hard-faced and wont consider it initially. My question is, could it take 6 months (or so) to serve notice or make the bankruptcy happen? If so, I would just pay it (makes sense) over that period? What happens when proceedings start? Would they take my vehicle and my wife's (its not my wife's debt and the car is in her name) before the bankruptcy was ordered by the court? Can I make a statement to the bankruptcy hearing to say I have paid x amount in the meantime or want to make reasonable payment?

Just dont know what to do?

Thanks in advance for any advice.

Regards

Mr Anxiously Worried!

National_Debtline · 16 April 2018 at 3:18PM

Hi Danny and welcome to MSE,

First of all, if you are still trading then I would suggest you consider speaking to Business Debtline for more in depth advice. They are available on 0800 197 6026.

With regard to the field agent, that could either be a debt collector or bailiff (more likely to be a bailiff in this situation). If it was a bailiffs and as long as they haven't been inside before, then do not let them in, hide your car(s) and don't sign anything with them. If they have been inside or you have signed something you will need to speak to Business Debtline ASAP.

With regard to the debt and the threat of bankruptcy you need to be careful. If you owe more than £5000 to a creditor they can issue you a statutory demand. This should try and be served on you in person and is the first step towards being made bankrupt. You would have 18 days to try and negotiate a repayment plan (and/ or 21 days to dispute it). If you can agree a repayment schedule and stick to it, then the bankruptcy shouldn't go ahead. However, if the HMRC refuse your offer and decide to proceed, then I am afraid bankruptcy is likely unless the debt is cleared or reduced below £5000.

If you are declared bankrupt then your assets (such as property, your car, savings etc) would be at risk. This shouldn't affect your wife's car, if she purchased it and is the registered owner/ keeper then it is nothing to do with this issue. I would suggest getting more advice ASAP and to either start paying money towards the debt or, at the very least, keeping something to one side ready to pay as soon as possible.

Laura
@natdebtline

Danny1973 · 16 April 2018 at 3:31PM

Hi Laura,

Thank you for your reply and your welcome.

I am trading as a limited company contractor however, this is a Self Assessment tax. My VAT and CT are up to date.

The field agent was not inside but did take note that I had Two Cars at the property (one mine and one my wife's). My concern really is that I can pay this in 6 months however initial conversation with her (field agent) was a hard faced no. I had 2 weeks and then it was bankruptcy. I was wondering how long does it usually take for a Statutory Notice to be served once the field agent decides this? or is it their decision?

BoGoF · 16 April 2018 at 3:33PM

Do you have further tax becoming due on 31 July?

Danny1973 · 16 April 2018 at 3:34PM

Yes, and I have this budgeted for.

System · 16 April 2018 at 3:38PM

HMRC bankrupted a friends Ltd business several years ago for non payment of VAT within a month despite being given proof of invoices due to be paid within the week which would have covered it. When HMRC decide they're going to bankrupt you they don't hang around.

However a bankruptcy isn't an automatic thing. You will go to a hearing and you can present an argument to the county court judge as to why you shouldn't be declared bankrupt.

BoGoF · 16 April 2018 at 3:39PM

If you are a Ltd co one assuns the tax is due asa result of a large dividend payment ? If so - what happened to the dividend?

National_Debtline · 17 April 2018 at 3:31PM

Hello again,

First of all, I hope I have understood your messages correctly and that this relates to self assessment tax from a time that you were a sole trader and nothing to do with the limited company. Assuming that is the case there are a few things to consider.

The field agent (as opposed to a bailiff) would come to assess your situation and ability to repay. They will take note of your assets, but they have no right of seizure. If you can repay the debt in a reasonable period of time (which can be considered to be less than 12 months) then the agent may accept this rather than suggest further action. However, this is not a definitive and is subject to discretion. If they have refused your offer, there may be more factors to consider. You should try and speak to the HMRC payment line (0300 200 3835) and make your proposal and payments directly to them and keep a note of what you have paid.

Situations can vary, so it is hard to give you any absolute rules about what the HMRC will accept, what action they will take or how long it will take for them to do this. As you owe more than £5000 bankruptcy is a possibility, so trying to get the debt below £5000 ASAP is the best thing you can do. Based on your situation I would suggest that you speak to Business Debtline about this in more detail.

Laura
@natdebtline

HMRC threatening Bankruptcy

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