HMRC and bankruptcy

[mgfboy]

I'm currently try to sort out a payment plan with HMRC for some back tax and they keep saying they may go for bankruptcy. If none of the other creditor want this can they do it on there own or would the judge see that we are paying them a large amount and the fact that it would make me/us unemployed count against them!!!

[LooLoo]

Re: HMRC and bankruptcy

Hi

I can't give you a definite answer on this but I am sure those who are more up to date on BR will be here soon.

However the HMRC can be a bit of a law unto themselves. It would appear a bit strange that as you are trying to work out a payment plan that they would go for BR - however as far as I am aware (someone will correct me if I am wrong) HMRC can and will petition for BR if they feel necessary.....

A friend of mine was made BR by them 2 years ago...... and he did have other debt...

ugh I hope it doesn't come to this for you.......

[Never-In-Doubt]

Re: HMRC and bankruptcy

I thought if you had a larger creditor then they can overrule things as they'd have a bigger interest?

See what rizzle says as he's good at these things.

[Riz]

Re: HMRC and bankruptcy

Info/advice here:

Tax debt and bankruptcy TaxAid

and

You need time to pay TaxAid

Sounds like they are only threatening it at the moment while you are negotiating. If you can negotiate a payment schedule then they may not go ahead. However, HMRC's idea of a "reasonable" time to pay back large debts doesn't tally well with what most normal people would think of as reasonable, and they will often go for BR despite it being likely it will cost them in terms of getting nothing back and fees.

[Never-In-Doubt]

Re: HMRC and bankruptcy

^^^^ see!

[SXGuy]

Re: HMRC and bankruptcy

HMRC are def a law unto themselves im afraid, they do what they like

Depending on the size of debt and the amount you are able to repay will weigh greatly on their decision.

I have a few clients who often repay tax, vat or PAYE if they find they cant afford it at that current period, its generally accepted after a bit of a slapping from HMRC.

Ive even heard them ask if a client can sell their TV to pay back the tax (dont laugh)

So it comes down to how much you owe, how much you can repay, and the time to repay the whole amount really.

I have found if you can afford repayments that are able to pay back the balance within 3 months they are ok with it.

But by the sounds of it, if they are considering BR then you must owe them quite a lot, and i would assume, its determinations, penatlies and what not?

If determinations are included in what you owe, it would be wise to seek an accountant who could calculate the correct amount of tax due and help reduce what you owe to HMRC, there may also be some capital allowances or expenses you are unaware of that could reduce the burden.

If this sounds anything like what you are facing feel free to pm me with your situation and ill either help or pass you on to our accountant.

[mgfboy]

Re: HMRC and bankruptcy

Thanks for the feed back we are talking £60k , I normally would just remortgage but because we fell out with HSBC a couple of years ago, they still have a second charge on our house and I trashed my credit record by going down the unenforcable route.

I'm in the process of quiriering some of the penalties etc, but that probably wont slow them down.

Looks like I'm going to have to sell the kids kidneys again!!!!!

[Riz]

Re: HMRC and bankruptcy

Ouch! How much equity to you have in the house?

[mgfboy]

Re: HMRC and bankruptcy

If I didn't have the second charge in place plenty with the second charge not enough. Anyway nobody does third charge lending, I have spoken to Paul about the charge situation though.

[CleverClogs (RIP)]

Re: HMRC and bankruptcy

Thanks for the feed back we are talking £60k , I normally would just remortgage but because we fell out with HSBC a couple of years ago, they still have a second charge on our house and I trashed my credit record by going down the unenforcable route.

I'm in the process of quiriering some of the penalties etc, but that probably wont slow them down.

Looks like I'm going to have to sell the kids kidneys again!!!!!

What about selling some of their livers?

Alternatively, getting in touch with your MP might help.

[SXGuy]

Re: HMRC and bankruptcy

Hang on guys, lets not jump into automatically accepting payment has to be made on 60k.

Forgive my questions, but i dont know the situation that lead to you needing to pay HMRC 60k.

Depending on the reasons could mean that 60k can be lowered.

When someone owes money to HMRC its normally based on calculations they have arrived at, whether it be based on actual figures or assessments.

Can you explain how you got a bill for 60k firstly? i dont need exact figures just a rough idea of how it got there.

Exluding pentalties, what was the rest based on? income tax due for previous years? income undelcared? VAT etc?

You say its back tax, does that mean it was tax raised on your net profit from past years, or determination by HMRC? i.e did they guess how much you earend.

Has self assessments been submitted for the years in question?

[mgfboy]

Re: HMRC and bankruptcy

The figure is correct , subject to penalties which I'm checking. It's from under payments on self employed earnings over a period that have been correctly calculated , as your probably aware in a partnership income calculation , your taxable earnings aren't necessarily what ends up in your pocket.

It all started out a few years ago when I was stitched up in a business deal which lead to HSBC kicking off and as I'm sure a lot of you are aware things then tend to snowball.

The funny thing is even though I've dealt with HMRC over many years, "I work a lot with accountants" the guy from HMRC almost made me laugh , I explained the situation and said would you rather get it paid or get nothing by making us bankrupt and his answer was it's what the system does!!! They basically would rather have their boxes ticked then get the money!!!!

They have been happy to go along in the past on my explaination which hasn't changed, it just thing time they have decided play hard ball.

[SXGuy]

Re: HMRC and bankruptcy

The figure is correct , subject to penalties which I'm checking. It's from under payments on self employed earnings over a period that have been correctly calculated , as your probably aware in a partnership income calculation , your taxable earnings aren't necessarily what ends up in your pocket.

I understand that what you are taxed on isnt always what you get in your pocket in a partnership, because the assessable figure for which tax is raised, could be split between the partners however you wished to maybe reduce tax due based on whether one partner has higher allowances for example.

this is a perfect example of why people should always get their accounts done on time, so they know the position they are in before it becomes due to HMRC.

So how come you owe underpayments? because you should have been told of the tax due based on correct figures at the time the accounts were prepared?

Did your business partner pay his/her share of tax on profits?

[mgfboy]

Re: HMRC and bankruptcy

I understand that what you are taxed on isn't always what you get in your pocket in a partnership, because the assessable figure for which tax is raised, could be split between the partners however you wished to maybe reduce tax due based on whether one partner has higher allowances for example.

this is a perfect example of why people should always get their accounts done on time, so they know the position they are in before it becomes due to HMRC.

So how come you owe underpayments? because you should have been told of the tax due based on correct figures at the time the accounts were prepared?

Did your business partner pay his/her share of tax on profits?

Know the amount payable and paying it are to different things, the bill is actually my wifes. Sometimes what should happen doesn't and I'm not going into details now on why it hasn't been paid. Just suffice to say when you lose a 6 figure sum after being stitched up in a business deal then then your income drops by 50k a year it effect your cash flow!!!!

[CleverClogs (RIP)]

Re: HMRC and bankruptcy

They won't accept your mother-in-law in full payment, will they?