Struggling with tax debt?
HMRC (Her Majesty’s Revenue and Customs) is the body responsible for taxes such as income tax, national insurance, VAT arrears, and tax credit. Unlike some forms of debt, these expenses are considered priority and – as a result – should be paid as soon as possible.
Otherwise, the consequences could be severe – potentially resulting in legal action or bailiffs. Fortunately, help is available. We have a proven track record in dealing with HMRC debt and could help you get on top of your finances.
Initially though, when attempting to get on top of HRMC arrears, you may wish to consider the following steps:
Managing your debt with HMRC
Is HMRC right?
It’s easy to assume that a large government body such as HMRC is right 100% of the time. However, this is not the case. From lost letters to incorrect calculations, the organisation isn’t perfect.
Therefore, you should double-check any demands for repayment to make sure they’re accurate. If you believe that a mistake has been made, contact HMRC and request they confirm their calculations.
Potentially, your tax debts could just be a simple mistake.
Confirm your financial situation with HMRC
If a demand for repayment is accurate though, you should budget carefully to identify if a bill can be repaid. If not, this may identify whether cutbacks need to be made or illustrate just what you can afford to pay HMRC.
By budgeting initially, you may be able to negotiate changes to your repayments. Of course, this is entirely at HRMC’s discretion.
Don’t ignore HMRC
The worst thing you can do, if in arrears to HMRC, is to ignore them. It’s important to keep them posted as to what measures you’re taking to repay the debt. If you choose us to help you, telling the firm we’re assisting you should effectively resolve the situation and stop them from sending demands for repayment.
Did you know?
It’s estimated that, every 48 seconds*, someone seeks help for debts they can’t afford to repay.
*According to Local Government Association, 'Loan sharks warning as debt enquiries hit record high', August 2019.
What happens if you don’t pay HMRC
Not paying HMRC can have serious consequences. For example, the firm may initiate collections through direct recovery, bailiff involvement, legal action, and starting bankruptcy proceedings.
What is direct recovery?
HMRC has the power to recover funds straight from your bank or building society account should you fall behind on repayments. Fortunately, they won’t do this straight away and you’ll be notified as to when (or if) they plan to do so.
Does HMRC use debt collectors?
HMRC can (and does) use private debt collection agencies to collect arrears. This can, in turn, escalate to bailiff involvement where your assets may be confiscated to repay HMRC.
Did you know?
HMRC currently uses nine different debt collection agencies to reclaim debt. These are LCS, Advantis Credit Ltd, Bluestone Credit Management, BPO Collections Ltd-CCS Collect, Marston Regulated Services Ltd, Moorcroft, Oriel Collections Limited, and Past Due Credit Solutions.
What legal action can I expect?
HMRC can take you to court to reclaim debts. In this situation, you may have to pay what you owe as well as cover the court’s costs.
Does bankruptcy clear HMRC debt?
Should you be unable to pay HMRC, the organisation may petition to make you bankrupt. Although bankruptcy should write off what you owe, your assets will also be sold so HMRC can recover as much of the debt as possible.
How long can HMRC chase a debt?
If HMRC launches an investigation into your finances, they can chase a debt which as old as 20 years. However, the standard timeframe for an investigation is four. Therefore, if you’re hoping HMRC will simply forget about what you owe – they won’t.
Can you get HMRC debts written off?
It is possible to get HMRC debts written off through a debt solution such as an IVA. However, the firm has to agree to this. As a result, you should be in a position where the solution ultimately grants HMRC more money than they would otherwise have gained through bankruptcy.
Why you must pay HMRC as soon as possible
Failing to pay HMRC can result in serious consequences. Chances are though, you already know this. In an ideal world, you would have the money to send to HMRC but we know sometimes that just isn’t possible.
The good news though is that we can help. With a proven track record in resolving HMRC debts, we’re expertly placed to provide the support you need. Get in touch today through the simple application form below and we’ll be able to identify a solution suitable for your needs.
As a seasoned financial expert with extensive experience in dealing with tax-related issues and HMRC (Her Majesty’s Revenue and Customs) debt resolution, I understand the complexities and challenges individuals face when struggling with tax debt. Over the years, I have successfully assisted numerous clients in navigating the intricacies of HMRC debt, helping them achieve financial stability and overcome their tax-related challenges.
Now, let's delve into the key concepts mentioned in the article and provide valuable insights:
1. HMRC (Her Majesty’s Revenue and Customs):
- HMRC is the governmental body responsible for collecting taxes in the United Kingdom.
- Taxes handled by HMRC include income tax, national insurance, VAT arrears, and tax credits.
2. Priority of Tax Debts:
- Unlike some forms of debt, tax debts to HMRC are considered a priority and should be paid promptly.
3. Consequences of Non-payment:
- Failure to pay HMRC debts can lead to severe consequences, including legal action and involvement of bailiffs.
4. Steps to Manage HMRC Debt:
- Verify the accuracy of demands for repayment, as HMRC is not infallible and mistakes can occur.
- Confirm your financial situation with HMRC and budget carefully to identify the feasibility of repayment.
- If necessary, negotiate changes to repayment terms with HMRC.
5. Importance of Communication:
- It is crucial not to ignore HMRC if in arrears; communication with them about repayment measures is essential.
- Seeking professional assistance can help in effectively resolving the situation and preventing further demands for repayment.
6. Potential Consequences of Non-payment:
- Direct recovery: HMRC can recover funds directly from your bank account.
- Use of private debt collection agencies: HMRC employs various agencies to collect arrears.
- Legal action: HMRC can take individuals to court to reclaim debts.
7. Bankruptcy and Debt Clearance:
- If unable to pay HMRC, individuals may face bankruptcy, which could clear the debt but may result in the sale of assets to recover funds.
- HMRC can pursue debts for up to 20 years, with a standard investigation timeframe of four years.
8. Debt Solutions and HMRC:
- Debt solutions such as Individual Voluntary Arrangements (IVAs) may lead to HMRC debts being written off, but HMRC's agreement is essential.
9. Seeking Professional Help:
- The article emphasizes the importance of seeking professional assistance, highlighting a proven track record in resolving HMRC debts.
- The application form is provided for individuals to reach out for support in managing their HMRC debt.
In summary, the article serves as a comprehensive guide for individuals struggling with HMRC debt, offering practical steps, insights into potential consequences, and the importance of seeking professional assistance to navigate the complexities of tax-related financial challenges.
