HMRC Debt Advice Please

[Taximan108]

When a collection Agency or HMRC assess the ability to pay a personal Debt, do either have the right to assess taking the partners income into consideration.

 

Background.

My wife has Glaucoma and no longer has a driving licence

 

. In 2013-2014 she started an embroidery business.

This ceased trading in 2015 due to my wife’s eye sight.

This was formed as a partnership with myself.

 

Our personal income tax was filed by our accountant.

Unfortunately a partnership return was not filed.

 

I contacted HMRC on my wife’s behalf 16 times to try to sort this matter.

They have records of conversations etc.

They notified my wife of Penalties.

 

Due to miss-information by HMRC (Wrong Forms etc.) we appealed this decision in January 2016.

HMRC misfiled this appeal.

 

HMRC told us to ignore any debt letters.

1st letter was received yesterday, so contacted HMRC immediately.

This was a complete waste of time.

They want me to send a new appeal out lining times and dates etc.

 

We have not as yet contacted Debt company(£500)

 

HMRC say she owes a further £1700.

Because of her condition she does some cleaning (self employed) with a friend and earns £50-£60 per week.

 

She pays a total of £12.50 in bus fares to travel to work

. She has a credit card in her name with £5000 debt.

 

I am self employed and income total of approx £300 per week inc Tax credits

. I have approx £11,500 debt on credit cards & personal loan.

I manage my debts and all the bills.

We pay rent of £92.77 per week.

HMRC have requested JOINT income details by Friday.

Please Help.

[dx100uk]

Well whatever you do

You totally ignore the DCA

They are not BAILIFF S

And have no legal powers whatsoever

[ericsbrother]

your debts and outgoings are nothing to do with a tax assessment or your tax returns

(apart from deducting certain things before calculating gross profit)

 

For a partnership if you dont state how the income is to be divided

they will assume that it is split 50/50 and so will need to recalculate your tax liability as well.

(that is the point of the partnership tax return, you then transfer the figures to your personal returns).

 

 

Without seeing your tax returns and knowing your incomes it is impossible to say whether they are right or wrong about any of this so you need to shake your accountant by the throat and get them to provide you with some understandable figures to work with and show HMRC

 

Dont give any information to the DCA, nothing to do with them and never will be.

[Taximan108]

The company actually posted a very small trading loss.

 

As soon as I received a bill from HMRC I contacted both Accountant & HMRC.

 

They gave me duff info, and continued to do so.

 

The penalties are for late submission of Partnership returns, not for Income tax due.

 

My wife was the controlling Partner(Not sure of correct terminology) and the demand is in her name only.

 

HMRC have asked her to give details of BOTH our current incomes & expenditure by Friday in order to evaluate how much she can afford to pay back each month.

BOTH does not sound correct.

Edited October 5, 2016 by Taximan108

[TaxHero]

How did you fill in your tax returns without the partnership return?

 

Did your accountant give you the figures?

 

HMRC can ask for a repayment plan and can ask for outgoings etc. Make sure the information is supplied to HMRC and not a DCA.

[ericsbrother]

yes both because it is a partnership that has caused the trouble.

 

If your accountant is actually qualified I would be telling them that they are liable for their cock-ups and you will be taking action to recover your losses due to their incompetence/dereliction.

 

If they are just some bod that does your books then you should have nothing to do with them ever again.

 

It is very simple to work out your own affairs if you start at a sensible place such as the beginning of the tax year.

[johnstanley]

If you share household expenses, such as rent/mortgage, utilities, other debt, etc then HMRC will ask about household income, rather than personal income.

 

This then allegedly allows them to make a more informed decision about whether it is appropriate to allow a taxpayer to pay any outstanding debt over a period of time.

 

This, I am told is a concession, rather than a right, so it is to your advantage to be as candid about income and expenditure as you can.

 

My colleague in that there tax house tells me that any agreement to pay by instalments must be both realistic and sustainable, so if it were you that needed to request this, then declaring your wife's income would give you a distinct advantage in the bargaining stakes.

 

However, since it is the other way round, it seems slightly unfair, but unless you comply with the request, it seems unlikely that they will agree to an instalment plan.

 

If you agree a repayment plan pending the result of an appeal of penalties, and then subsequently your appeal is upheld, then any payments you have made can be reimbursed to you.

 

If you feel relatively confident that your appeal will be successful, then it is a small pain to agree a long-term repayment plan (given that the debt will only increase due to interest) that will only run for a few months and then be cancelled, but will avoid the possibility of HMRC sending the debt to a DCA whose approach will probably be more aggressive and unpleasant.

 

Anyway, I hope the OP's appeal was successful and that they are no longer plagued by these so-called penalties.

[dx100uk]

the possibility of HMRC sending the debt to a DCA whose approach will probably be more aggressive and unpleasant.

 

 

DCA are powerless on a govt debt.

[johnstanley]

That may well be the case, but they can still be aggressive and unpleasant.....

[dx100uk]

no it is the case....not may well be..

 

 

a DCA is NOT A BAILIFF

and have absolutely no legal powers whatsoever on any debt regardless to whom its owed too..

let alone a gov't establishment.

 

 

all they can do is threaten that their client may take them to court etc etc

and what might happen if they do.