Help/Advice needed
Discussion
Right, I've been very stupid.
You'll notice this post is from a newaccount, I have an overwhelming sense of guilt/shame/self loathing over this so please no comments of the "you dumb ass" variety, I am fully aware of what's been done and just how stupid I have been.
I have managed to knock up a massive amount of debt (corporation tax owed to HMRC + small amount of VAT + Personal Liability) through a combination of circumstance/poor management/poor accounting practices/stupidity. I have no other debt.
I have now stepped away from the contract work (ltd company) and now have a PAYE income stream, on substantially less than I was taking home previously (but then I can't dig a bigger hole now, so that's good news in a way).
I've just pulled my head out of the sand in the last 6 months and engaged an accountant (a good one this time) to sort through all of my affairs and come back with the total damage done.
It looks like this will be close to 50000 in all. Yes, that Fifty.
I have no savings/equity/assets (sold car and took a bank loan to cover the last HMRC demand).
In a nutshell, the wolves are at the door.
I am married, and she's aware of the scale, but I'm trying to protect her from things, so this post is somewhat cathartic, admitting my weakness.
I know I should be waiting for my accountant to talk me through options but I'd be interested in any of your experiences on these matters.
Anyone know what I can expect?
Is bankruptcy an option?
Is a repayment scheme an option?
What are the knock on effects of the above options?
Any help / advice appreciated.
You'll notice this post is from a newaccount, I have an overwhelming sense of guilt/shame/self loathing over this so please no comments of the "you dumb ass" variety, I am fully aware of what's been done and just how stupid I have been.
I have managed to knock up a massive amount of debt (corporation tax owed to HMRC + small amount of VAT + Personal Liability) through a combination of circumstance/poor management/poor accounting practices/stupidity. I have no other debt.
I have now stepped away from the contract work (ltd company) and now have a PAYE income stream, on substantially less than I was taking home previously (but then I can't dig a bigger hole now, so that's good news in a way).
I've just pulled my head out of the sand in the last 6 months and engaged an accountant (a good one this time) to sort through all of my affairs and come back with the total damage done.
It looks like this will be close to 50000 in all. Yes, that Fifty.
I have no savings/equity/assets (sold car and took a bank loan to cover the last HMRC demand).
In a nutshell, the wolves are at the door.
I am married, and she's aware of the scale, but I'm trying to protect her from things, so this post is somewhat cathartic, admitting my weakness.
I know I should be waiting for my accountant to talk me through options but I'd be interested in any of your experiences on these matters.
Anyone know what I can expect?
Is bankruptcy an option?
Is a repayment scheme an option?
What are the knock on effects of the above options?
Any help / advice appreciated.
For a start, the limited company debt is not yours personally and could, in theory, be walked away from without the need to look at personal bankruptcy.
(I am assuming that you had not signed any director's gurantees in respect of company debts or borrowings).
Although morally there is a question about whether a person should allow the company debts to die without any meaningful attempt to clear them, it is legally posiible and could be a solution without the need to go down the personal bankruptcy route.
The £15,000 personal debt is more worrying as you cannot hide from that. You either come up with one of the various methods of clearing the personal debts, such as simply paying them off or entering some sort of Voluntary Arrangement or, if none of trhat is feasible, look at personal bankruptcy. £15,000 to me does not seem such a nig amount that banruptcy is the solution.
From what you say, it sounds like you had not engaged a professional accountant to assist you with the company affairs up until now. It may be that there are losses in the business or unclaimed allowances that could allow the company to substantially reduce any Corporation Tax amounts owing. Your new accountant should identify any such avenues for you - if he's any way half decent.
There may even be similar reductions avilable, regarding any personal tax amounts you may owe.
(I am assuming that you had not signed any director's gurantees in respect of company debts or borrowings).
Although morally there is a question about whether a person should allow the company debts to die without any meaningful attempt to clear them, it is legally posiible and could be a solution without the need to go down the personal bankruptcy route.
The £15,000 personal debt is more worrying as you cannot hide from that. You either come up with one of the various methods of clearing the personal debts, such as simply paying them off or entering some sort of Voluntary Arrangement or, if none of trhat is feasible, look at personal bankruptcy. £15,000 to me does not seem such a nig amount that banruptcy is the solution.
From what you say, it sounds like you had not engaged a professional accountant to assist you with the company affairs up until now. It may be that there are losses in the business or unclaimed allowances that could allow the company to substantially reduce any Corporation Tax amounts owing. Your new accountant should identify any such avenues for you - if he's any way half decent.
There may even be similar reductions avilable, regarding any personal tax amounts you may owe.
Thanks for taking the time to reply.
Yes the moral question is the one that nags away at me.
I could come to an arrangement and pay it off over 10 years, I think that would be possible (assuming no change in circumstances).
As a general question, are HMRC open to this kind of suggestion?
Or do they typically hold firm and demand everything as a lump sum?
Yes the moral question is the one that nags away at me.
I could come to an arrangement and pay it off over 10 years, I think that would be possible (assuming no change in circumstances).
As a general question, are HMRC open to this kind of suggestion?
Or do they typically hold firm and demand everything as a lump sum?
Edited by jimbo9991 on Wednesday 11th August 17:41
jimbo9991 said:
Thanks for taking the time to reply.
Yes the moral question is the one that nags away at me.
I could come to an arrangement and pay it off over 10 years, I think that would be possible (assuming no change in circumstances).
As a general question, are HMRC open to this kind of suggestion?
Or do they typically hold firm and demand everything as a lump sum?
I think 10 years would go down like a lead balloon with HMRC. If you can't make the correct payment in full on the normal due date, they will usually only accept payments of arrears spread over a six month period.Yes the moral question is the one that nags away at me.
I could come to an arrangement and pay it off over 10 years, I think that would be possible (assuming no change in circumstances).
As a general question, are HMRC open to this kind of suggestion?
Or do they typically hold firm and demand everything as a lump sum?
Edited by jimbo9991 on Wednesday 11th August 17:41
As I said, there may be legitimate ways to get some of the tax liabilities reduced anyway. If you have been looking after your own affairs up to now, my hunch is that the liabilities that you calaculated could very well be overstated. It's up to your new accountant to see what you did in the past and come up with some better and more professionally prepared tax computations and allowance claims.
That's kind of my fear, I have no way of paying that sort of money in that sort of timeline.
I was using an accountant alright but as I say, there was little or no steerage/management of the finances. Unfair to blame them entirely but the total hands-off approach led to much of my poor planning. Nonetheless, I am where I am.
Thanks for the input.....
I was using an accountant alright but as I say, there was little or no steerage/management of the finances. Unfair to blame them entirely but the total hands-off approach led to much of my poor planning. Nonetheless, I am where I am.
Thanks for the input.....
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