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Where Taxpayers and Advisers Meet

Please help

Turbotony2015
Posts: 4
Joined: Sun Mar 15, 2015 3:30 pm

Please help

Postby Turbotony2015 » Sun Mar 15, 2015 3:39 pm

I have A tax bill of 15k for overdue returns and the dmb are chasing me its at last resort, my dad passed away in December and left a life insurance policy that will cover this bill so I can pay it in full and it will be paid out in a matter of days or weeks, but in the mean time I feel like killing myself over this I'm so scared

I've been working at a loss for years and have been killing myself to stay afloat as I have a house I own and my mum lives in it with me and I don't want to loose it it would destroy her and me, I know I've been daft but what options do I have? Can I sell the business to my mum to protect it while I fight to pay this bill is that legal she has put thousands in over the years to help me

I have 2 separate small business in the same building so I want to transfer the main one from my name to protect jobs that are being completed in case they try to take my stuff, the smaller one I would keep in my own name

Please help

Lambs
Posts: 1418
Joined: Wed Aug 06, 2008 3:15 pm

Re: Please help

Postby Lambs » Sun Mar 15, 2015 4:17 pm

T,

I am not sure how you are in this position but if you have been making losses then you should have no tax to pay - unless you have been using PAYE tax to shore up the business' cashflow?

It seems you are in arrears with your tax affairs. If you submit outstanding tax returns showing losses, then your liabilities should be reduced to nil - you may even be entitled to a tax refund. Penalties are a different issue but even then there may be a reasonable excuse for not having filed.

Do you know how many returns are outstanding?

It is difficult to advise without knowing more about the history of your case but if you have not spoken to HMRC recently, then you should, to let them know that you may have funds in a few weeks to settle outstanding liabilities. HMRC treats people differently if they believe that they do want to pay, as averse to people who ignore / do not want to pay.

I hope this helps.

Regards,

Lambs

Turbotony2015
Posts: 4
Joined: Sun Mar 15, 2015 3:30 pm

Re: Please help

Postby Turbotony2015 » Sun Mar 15, 2015 4:26 pm

Basically I've been stupid and not filed my returns I've had many problems over the years and it's is my own fault I know this I should have done them and now I'm basically scared out of my wits it would take me ages to get the paperwork in order to do it so the only thing I can do is pay the bill when the money arrives and I have paperwork to show them about the life policy that would prove I can

I first had a letter last year and I did ignore it as the whole of last year we were battling to keep things right as my partner has a severe mental condition which almost led to social care taking the kids, which I know is not a great reason but the pressure it put us all under was immense

When I can get the returns in order they will show losses but they wanted this done in days and it would take me weeks and weeks along side the family commitments, caring for my partner and work

Can I sell the business to protect it at this stage it's not so much for myself but my customers as I don't want them to be let down, the equipment and tools ect and assets in the business are next to worthless anyway

My current running tax year I am actally finally in profit and the business is now viable and growing, but I myself am not

Lambs
Posts: 1418
Joined: Wed Aug 06, 2008 3:15 pm

Re: Please help

Postby Lambs » Sun Mar 15, 2015 5:52 pm

T,

Have you discussed these issues with HMRC yet?

In line with my earlier post, if you have been silent, you will by default fall into the "won't pay" camp. If you explain your position to them, then you should in my experience find them much easier to deal with.

I presume you do not currently have an agent, otherwise he or she should normally be engaging with HMRC on your behalf.

Regards,

Lambs

Turbotony2015
Posts: 4
Joined: Sun Mar 15, 2015 3:30 pm

Re: Please help

Postby Turbotony2015 » Sun Mar 15, 2015 6:27 pm

No I haven't been in touch with them yet I'm going to ring them in the morning just really needed to know what I can do to safe guard the business while I sort this out , I've got all the information together as regards the insurance payout so I can send proof if needs be to them

No I have no agent ect to speak to them so will be doing so myself but I am scared of calling tbh if I lost the business at this point just as I have turned things around I don't think I would be able to cope with something else after the last 18 months I've been through with everything

Is it legal for me to sell the business on at this point ?

Lambs
Posts: 1418
Joined: Wed Aug 06, 2008 3:15 pm

Re: Please help

Postby Lambs » Sun Mar 15, 2015 6:53 pm

T,

That's a legal question rather than a tax question. My understanding is that you may not enter into a bad bargain in order to put assets beyond the reach of your creditors. In other words, if you sold your business at full value then fine, the creditors would simply take their share of the proceeds instead. If you sold it to a connected party for £1, then they may have a claim against you and/or the new owner for the assets which you have tried to remove from your possession. I am pretty sure that is the case with (for instance) settling something into trust.

However, I think you are getting a bit ahead of yourself. If you have not done so already, I would do the following things tomorrow:

Contact DMB
Tell them you want to settle all tax you owe, as soon as possible
You stand to inherit part of the proceeds of your late father's estate sufficient to cover your liabilities as stated at this point but it may take some weeks for the proceeds to pay out
You will in the intervening period work to bring your tax affairs up to date.
You have been prevented from doing so in the normal course of events due to your partner's illness which can presumably be proven if and when the time comes
You expect that the outstanding returns will result in losses for tax purposes so at least some of the debt is not actually due but understand that HMRC will continue to try to collect the debt they estimate to be due until such time as it is displaced by a valid tax return.

Depending on the seniority/experience/disposition of the person who takes your call, you may get some sympathy and an agreement to postpone further action for x amount of weekes. Alternatively you may get someone who resolutely sticks to a script.

If the DMB officer starts to give you a hard time, or to suggest that it's too late for this kind of postponement, explain that you want him or her to note your file with the points as above.

This is because, when more serious action is being contemplated, your file should be reviewed by a more senior officer who SHOULD take your comments into consideration.

You should contact HMRC as soon as possible, since life is much more difficult once a debt is passed over to a separate debt recovery specialist (usually a firm of solicitors or similar) which is paid for results, not co-operation.

Regards,

Lambs

Turbotony2015
Posts: 4
Joined: Sun Mar 15, 2015 3:30 pm

Re: Please help

Postby Turbotony2015 » Sun Mar 15, 2015 7:07 pm

Thank you for your help, yes her ilness can be proven we have had to go through hell and back with all legal bodies over the children social services schools ect and all is documented including a child protection case they tried to put on us because of her illness.

I have had a letter of notice of enforcement by taking control of goods can I battle this bearing in mind I will have the Money to settle this and I can prove with the documents from the life insurance , I know they will still expect the full debt to be paid in full till the returns have been caught up which I am happy to do but I'm just worried of the stage this is currently at


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