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HMRC tax bill that lead to bankruptcy

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  • HMRC tax bill that lead to bankruptcy

    Recently HMRC passed on a tax bill to the Insolvency agency.The original bill was for £4000. The bill was for a period of time after my wifes business ceased trading.My wife phoned HMRC when the first bill came and informed them she was on PAYE and told them when her business was wound up.When the business was wound up she phoned HMRC to get a figure for her final tax bill and settled this with a cheque.But for some reason HMRC had not taken her off self assessment .
    6 years later another bill turns up with colossal interest added making the bill £20,000 from £4000.Again my wife phoned HMRC to inform them she has been with PAYE employers since the business ceased trading.She also sent a letter by recordered delivery with all this information.
    Then a few weeks ago a letter shows up from the Insolvency Agency to say she has been made bankrupt.She attended a meeting and was told by the interviewer that something didn't seem right about this and that she should challenge this.She was then told she could only challenge this after settling the bill and all paperwork completed.After all charges this bill rocketed to £36k.My wife was told that unless the bill was settled she would have to put our home up for sale to cover the bill. Luckily a family member stepped in and helped her out.
    How can my wife challenge this? It clearly is not right. Would she need to seek advice from a solicitor that specializes in these cases or would she need to go to an accountant? I really do not know where to turn. The whole episode makes me feel sick to the stomach that a government agency can act in such a way.The stress has been horrendous all for something that is not even owed.
    Any advice would be most appreciated.

  • #2
    Welcome to AAD. You need specialist help, especially as it has gone so far. The only suggestion that I have (from ignorance of how this all works ) is to look here
    Many years ago when we disputed a tax decision, we were given guidance on how to complain and to go down this route and we won. We had help from a specialist who advised on wording and the correct actions.

    The problem that you have is that a lot of contact was by phone and you have no record o this unless you wife noted down who she spoke to and when. Your wife could send a GDPR to request all information that is held on her tax affairs.
    I'm an official AAD Moderator and also a volunteer, here to help make the forum run smoothly. Any views or opinions are mine and not the official line of AAD. Similarly, any advice I have offered you is done so on an informal basis, without prejudice or liability. If in doubt seek advice from a qualified insured professional - Find a Solicitor or go to the National Probono Centre.

    If you spot an abusive or libellous post then please report it by Clicking Here. If you need to contact me, for instance if I've issued you a warning, moved, edited or deleted your post, please send me a message by clicking my username.


    • #3
      Thank you very much for the information.