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kirkndave
Starting Member
United Kingdom
4 Posts |
 Posted - 08 March 2010 : 12:55:04
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We are really unsure of the route to take.
My husband set up his own business (he's a sole trader) about 5 years ago and made a few early business errors - mainly tax related. Last year, due to this, we were paying the taxman a large amount per month to pay him what we owed for the previous year. It was hard work, but we did it. Unfortunately last year, my work contract ended, so I was no longer bringing in money and also my husbands work van broke down, so our income and expenditure last year was pushed to the limits. We now find ourselves in an awful situation, where we owe the taxman now for last year and due to paying previous tax years and a whole load of unexpected expenditure, we can't pay the full amount in one go. They won't except our offer of a monthly payment to pay them. We have been on the taxaid website, so now the procedures they could next follow but we want to make sure we have done everything possible to help us out. (we have 4 kids under the age of 8)
As far as we can see, the taxman forces us into bankrupcy and we lose our home but clear our debts. Or we voluntarily go bankrupt before we are forced to....
Or, we have just found out we have equity in the house, which would cover our tax bill. So therefore, do we attempt to sell, pay all tax bill (but not other debts).... We then have the issue of renting a home by the kids schools/preschools (I don't drive). Our mortgage is currently interest only, so we are paying much less than we would do if we were to rent.! So therefore selling up and renting, would be added strain on financies, but doable.
Too many options and so much we don't know about. We desparately want to sort this out, regardless of what route we take, we just need guidance and professional advise through all of this! We need to be prepared and take the right option but at this stage, we don't know what that option should be. Can you guide us? |
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gettingoutofdebt
forum expert
2418 Posts |
Posted - 08 March 2010 : 16:29:03
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If HMRC won't accept monthly repayments then they will declare you BR. If you declare yourself BR you would lose your property as it has equity and this amount would be paid to your creditors.
Are you able to pay off your mortgage and tax arrears if you sell the property? If so, then I would recommend this option as you would have paid off your debts and won't be BR.
Declaring BR may seem an easy option and a quick way out of your debt problems but it really is a last resort. |
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kirkndave
Starting Member
United Kingdom
4 Posts |
Posted - 08 March 2010 : 17:21:31
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Thanks for that. Yes, really want to steer clear of BR and with HMRC not giving us any option on our suggested payment plan, looks like selling the house is the only option. Although, we have gone back to them with another suggested payment plan but I can imagine, he'll not be having any of it.
We don't have enough in the equity to pay off both the tax and the rest of the debt but at least we should be able to pay back the tax and hopefully we can keep on top of the rest of the debt. There is planning going through for a development behind our house, so it's going to be tough attempting to sell at this point, which is a added hassle. But it's worth ago and if we can get the extra needed to pay the full tax bill, then that will be a good solution for us.
What a mess! |
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Daniel Griffiths
Junior Member
United Kingdom
268 Posts |
Posted - 08 March 2010 : 20:43:11
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Hi Kirkndave
Have you considered an IVA, I am not a fan of these but in your situation it may well help, the taxman will support an IVA providing you have not been reckless in your tax affairs. If you post on the sister site www.iva.co.uk there are several experts that will give you advice |
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kirkndave
Starting Member
United Kingdom
4 Posts |
Posted - 09 March 2010 : 10:56:12
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Thank you for that.
Another sleepless night weighing up our options. I have sent the same post to the IVA website for anymore advice.
Still want to steer clear from BR but even if we do manage to sell our home and pay the tax owed with any equity, we will still have the added strain after selling up of our bad credit ratings, CCCS payments (although they have been incredibly helpful) renting accommodation for more than our mortgage costs are at the moment and attempting to stay a float and ensure we have next year's tax bill put aside. Afraid it's going to be never ending :-( as we have no back up funds to help with bank charges, late payments etc.
I'm currently looking for full time work (I've always worked full time since I was 17 with only taking 3 months maternity leave through having 4 kids) as my contract ended last christmas. I work in banking (on the technical side) and I have just found out I have a CCJ, so the likelyhood of earning as well as I have been to help pay for this debt is very limited due to this CCJ, which we were unaware of!Arghhh.
Anyway, thanks again for your advice and guidance. It's really appreciated. |
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Richard P
Senior Member
United Kingdom
1701 Posts |
Posted - 09 March 2010 : 12:52:21
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Hi KirknDave
the good old HMRC, once they have decide to take action they will do so but it can take upto a year. so you may not have an option with BR
the strange think is that in a few months it is likely that your file will pass to another office who may be prepared to negotiate a settlement !
you are right to post here and start looking at what action you should take, i would not consider putting your house on the market until you have discussed the whole scenario including other debts with one of the experts to the left.
Paul and his team at Reviva were ab fab with my situation, BR was the option for me but they are able to offer a full range of financial options.
good luck and regards Richard |
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