Inland Revenue - Penalties et al - Advice please!

[Arachnae]

Hi All!

 

I am trying to help my young business partner sort out his credit mess. The first of his creditors has now contacted him (after filing of P46) and this is probably the worst - the Inland Revenue. Basically he has been an ostrich and more or less 'did a runner' by not contacting the Revenue for quite some time. 'Normal' creditors I can deal with easily, but the Revenue are a different entity and I would be grateful for some advice. I hold all the shares in our company at present, and he is not a director so our company and its assets are safe from the Revenue's grasp.

 

The Revenue have now sent a notice warning of legal proceedings. I have responded for him saying that has he basically has no possessions worth having, distraint proceedings would be a waste of time but that he wants to sort the situation out with the Revenue and asking for an appointment to discuss the issues with them. He is staying at mine and another friend while he looks for permanent accommodation. All the stuff in the house is mine and I can prove it. Any fool bailiff turning up will be given a poke in the eye and they have no hope against me so it is not that aspect that concerns me.

 

The Revenue are after tax, penalties and interest. They also wish him to file a number of returns. Unfortunately, most of the records, invoices and receipts from the time the Revenue are after, do not exist any more. He moved around, lost most of it and then when working and living on site for a pub operator, the site was repossessed and he lost most of his gear and paperwork. This will of course cause a problem with the missing tax returns.

 

What I want from the Revenue is a reduction in the penalty and interest charges, and time to pay. I also need them to take a view on the missing tax returns. I am thinking of approaching it on the basis that he was very young and unexperienced (21) when all the trouble started (he is 24 now) and was basically stupid.

 

Does anyone have any experience in this? We are a fledging company and at the moment would struggle to pay an accountant to help - I don't trust the buggers much anyway truth be known.

 

Can anyone point me in the right direction on how to approach this with the Revenue?

 

Many thanks.

[Guest Zooman]

Yes he is ballsed. Getting a meeting together is the only way forward, they will not ALTER penalty and interest charges but they may write some of the tax off.

 

Also they will demand the returns (and right they should) as it not up to them to take his word for it, he will just have to sort it out best he can and understand if he can not find invoices etc he will be paying tax on the money he spent.

[Its WAR]

How much do they want? You may negotiate 50% off if you can offer them your money during the meeting, there and then. Dont go for time to pay, go for the cheapest quickest settlement. A bird in the hand etc. Then put it behind you. Otherwise you will go braindead. Reclaim his bank charges. Tidy up his credit reference reports. And bit by bit, he learns in the school of life. Otherwise, let them sing for the money. Pay off the creditors instead.

 

Let the tax collector know your money is only on offer to them on first refusal basis, if they dont want it, you will share it out amongst the other 20 creditors. It will be paid out as quickly as it takes to negotiate individual settlements (all the normal creditors will settle).

[Arachnae]

**** me boys. The future is not flippin orange it is bleedin midnight blue... Thank you both for your input. It confirms to me that dealing with the Inland Revenue is like dealing with the flaming reaper. I will do the best I can with the steadfast stance that he is a financial nincompoop and the only hope of any payment is though my thus far creditworthy company...

[veryannoyed]

When the Revenue were after me for lots of money (lots of thousands) I simply said to them this:

"You have two choices, either wait for me to earn money and I can gradually pay off what you say I owe you, or Bankrupt me and get nothing, because I have nothing of worth... the choice is entirely yours, I'm not bothered either way!"

.... of course, this takes a lot of balls...

The upshot was after agreeing to pay them a few hundred quid "goodwill gesture" they decided to wait.

That was a year ago, have since paid them more, still owe probably 50% of what they originally wanted, but they are STILL waiting.

 

If he has not much to loose by Bankruptcy, then its a good challenge (I'm not saying GO bankrupt, but I found it very useful to let revenue know I had seriously contemplated it and was not in the least bit bothered by the prospect.)

 

At the end of the day, even the revenue CANNOT get blood out of a stone... they cannot have what he hasn't got, simple as that. By giving the alternative of getting payment gradually or getting nothing at all and the debt being written off, which are they likely to choose?

[andrew1]

Hey veryannoyed, just a minute. You seem to be delighting in not paying or getting away with as little as possible. Whilst I can understand where you are coming from, think of those who Have to pay their taxes, in full through the PAYE system. I run a company and have to pay corporation tax too. Now whilst it is admiral to take on a friends difficulties and try to get him back onto a level playing feild and away from distress in the future please do not look upon the Inland Revenue as someone to rip off when all those working HAVE to pay.

 

We are all trying to get banks to write off debt or reclaim what they have taken, but if this fellow's been irresponsible then he has to make it up and not at the cost to others who have paid.

 

Zooman is right.

 

Negotiate a deal by all means, bankruptcy is no way forward especially if he's joining in a business venture and I wish him luck. And I'd be careful how this is treated in a company too if this is being cleared through the company.

 

For the record, for anyone thinking I am some kind of saint and had no difficulties myself and paid paye all my life then think again, I have run businesses, been through a liquidation through no fault of our own, been two yrs without income, paid six figure tax bills, had an 18 month full Investigation covering 6 yrs work by the Revenue ( only to get a refund! ) and nearly had a breakdown as a result of the financial fallout - so I am more than expereinced in both helping others through difficulties AND fighting the feckers you are talking about. As I say - just for the record.

 

I wish you luck in helping him get straight - it's just he has to know what you are doing and how bailing him out is something he has to learn from.

 

Sorry - that's got that off my chest!

[veryannoyed]

Hey veryannoyed, just a minute. You seem to be delighting in not paying or getting away with as little as possible. Whilst I can understand where you are coming from, think of those who Have to pay their taxes, in full through the PAYE system. I run a company and have to pay corporation tax too. Now whilst it is admiral to take on a friends difficulties and try to get him back onto a level playing feild and away from distress in the future please do not look upon the Inland Revenue as someone to rip off when all those working HAVE to pay.

 

 

Er..... Excuse me?!?!

 

Where exactly am I "delighting in not paying or getting away with as little as possible" ?

 

I was merely discussing, by giving example of what worked for me, of ways round the problem given? I thought that was the whole point of a 'Forum' ?

 

As I quite clearly stated, my way takes a lot of balls, but it worked for ME.

 

I am not at all delighting in not paying what is owed, though I do delight in not paying them £60k of a bill they insisted I owed them, which I don't, but that's a whole other story

 

I am merely pointing out the fact that NO-ONE, not even the revenue can take what you do not posess. They have two choices, just like all other creditors, either they wait, be vaguely reasonable and get paid bit by bit as and when the debtor can afford it, or they force bankruptcy and get sod all. In MY experience I have discoverd that when you plainly explain to a creditor what are, after all, the only 2 possible choices, they always see sense.

[andrew1]

Oh, that's alright then - my apologies if I responded inappropriately.

[veryannoyed]

apology graciously accepted

[Arachnae]

Thank you all for your comments. He is not trying to avoid paying the Revenue and yes, it is obvious he has been irresponsible in his dealings with them. Having said that, I was a nincompoop at 21 too but luckily was not in a position to make the same mistakes he made. He has also stood on his own two feet from age 16 without anyone to fall back on - so he does understand and appreciate how much I am helping him. This is not the case of a spoilt brat getting into trouble and being bailed out.

 

I will take veryannoyed's stance when dealing with the Revenue because their charges and interest make a manageable debt unmanageable and veryannoyed is right - you cannot get blood out of a stone.

 

If they are reasonable they will get paid. I am hoping that the person dealing with the case will not be a 'little hitler' which some of these bureaucrats are, but actually someone with some sense. We shall see.

 

Thank you all!

[veryannoyed]

Well I can only say that I found that by being very firm, but obviously not rude, I managed to have quite a sensible conversation with them.

 

If you can afford to pay them £100 today, for example, I found it better to say "I can only afford to give you £50 today, but please call me again at the end of the week for another £50"

 

If you keep this tactic up then instead of your record showing you were forced into making one or two large payments, it shows you have voluntarily made lots of payments towards the debt, which if it should ever end up in a court is going to look much, much more in your favour even though the actual amount of money is the same.

 

Keep us posted how it goes

[Arachnae]

Good tactic! Thanks again. I will post with any further movement. The meeting with the Revenue will be interesting...

[CrispDust]

If you are going to represent him in any way with the IR then it might be sensible to have some sort of tax investigation insurance arranged.

It wouldn't take much for your name to suddenly be at the top of the list for 6 years back investigation.......

[andrew1]

Generally, although it might be a bit late, the Federation of Small Business (FSB) membership allows members a consultant for tax investigations under their legal advice line. The cost of membership is about £70 and I have previously spent hours and hours talking to lawyers of thiers about no end of issues and it costs you the annual £70 for 24/7 access for you and your employees and family. Worth every penny. Federation of Small Businesses (FSB) - Britain's Largest Business Support Organisation

[Innocenti]

My hubby had dealings with the Inland Revenue, they are a nightmare and they NEVER give up. Last year my hubby received a self assessment form from 1999 to 2000, we filled it in the best we could and thought that was the end of it. We then got a £700 bill for tax. As it was so long ago we couldnt prove any of it as we had sent all his self employed tickets to the Tax Office.

 

They sent letters and he replied that he was in dispute with the amount and was told to ring a different numbers. He tried 9 times to ring them and each time "the system was down", but they "were putting notes on his account that he was trying to contact them". Then we got a court summons and got a lovely CCJ for his trouble.

 

We do not dispute that we may owe SOME money, just not that much and they wouldnt give us time to sort it out, everytime we tried "the system was down".

 

Tell your friend to see the Inland Revenue as soon as he can and try to get it sorted with them. Otherwise they will estitmate how much he owes and he will be stuck with it.