My heart sank this morning when I opened a letter asking for details for 4 years worth of SA returns.
For a few years I've been in a cycle of trying to catch up with Corporation Tax for my ltd co for which myself and my wife have a 50% share each. I'm getting there but I'm still behind currently. To catch up, I've been working about 90hrs a week, every day and every night as an IT contractor. Every penny I get goes straight out to either bills or hmrc.
In year one, divi's were 60k (30k each) and in addition to our salaries, there was nothing further owing for SA. Only I am registered for SA.
In subsequent years (the ones asked for), it's been over into the 40% bracket and I know this sounds stupid but each January I've been working such mad hours that the tax return seemed like something to get out of the way in order to carry on working and so I kept just putting 30k down as the divi every year. To be honest, I wasn't sure whether it was under or over, I just put 30k and thought it was there or thereabouts.
CT and VAT has been my sole focus. Getting this letter today, I've had to go and look back best I can at what the divi's actually were that I've taken. Doing the sums, it looks like I will owe about 40k. My wife will, too, though they've only written to me. She just had a letter recently asking her to complete a tax return for the first time, last week. I was glad about that and intended to do it properly from this point, what a blow this is today. That letter must have been part of something wider.
Right now it feels like the world is ending. I've tried, I've worked every hour I can possibly stay awake for in order to try my best to get up to speed with everything and I was due to be totally clear in terms of the company debt to hmrc by Mar 2016 for the first time ever.
No matter how I play with my spreadsheet, I can't seem to be able to cover this 40k each in anything less than 4 years and that's before any penalty they'd apply.
All I can think of is going to prison and losing the house. I'm absolutely distraught.