Urgent advice: HMRC liabilities

**Kenny@MyAccountantFriend** · 14 December 2015, 16:44

You will need to contact HMRC time to pay department and hope to speak to someone sympathetic to your reasons for being unable to meet your liabilities.

From experience the Corporation Tax office is not very lenient if the reason is that you took loans from the company as a director.

**Michael at BI Accountancy** · 14 December 2015, 16:52

All you can really do at this stage is try and work out a payment plan with HMRC. I suggest contacting them sooner rather than later and explaining your situation (they are human after all).

This simply sounds like you have had the money out of the company without any planning for liabilities due (corporation tax/ personal tax/ VAT).

I would suggest you get an accountant onboard who will work with you on a monthly basis. I would highly recommend investing in FreeAgent which (if up to date) can show you a nice estimate of how much you need in your account to cover these liabilities.

Good luck,

**TheFaQQer** · 14 December 2015, 16:59

Originally posted by bstone73 View Post

1. I received a massive bill of income tax amounting to £32 000 that is payable end of January 2015. I do not have the money to pay all of it in one go. Looking at the forum and advice given to others in this situation, it seems I need to contact HMRC ASAP to arrange payment - if accepted! Are there any other advice on the table, taken into consideration points 2 and 3.

To rack up an income tax bill of £23k, you need to have earned £104330 through PAYE and paid no tax on it as you did so, or paid yourself an even bigger sum as a dividend and the tax bill has just hit.

Ring HMRC and explain to them that you've spent all the money and agree a repayment plan.

Originally posted by bstone73 View Post

2. I received another bill for my corporation tax amounting to £18 000 and is payable 26th December 2015. Again, I cannot afford to pay the full amount due to HMRC, what other options do I have, other than just contacting HMRC?

Where has the money gone that is owed to HMRC? If you paid it out as a directors loan, then the company should recall the loan and pay the corporation tax - I know that doesn't help your personal situation because you now need to find another £18k as well, but if it's a loan then call the loan in.

If it has gone on dividends, then it may well be that those dividends were illegal because they didn't come out of profit. If that's the case, then your personal tax bill is going to go up because either it's a loan that you need to pay interest or a BIK on, or it should have been salary that you need to pay income tax and NI on.

You'll need to explain to HMRC where the money has gone so you can work out how to recover it.

Originally posted by bstone73 View Post

3. On top of the 2 above bills, I have my VAT bill that is due as well. This needs to be paid in January 2016. Again, I will not have the full amount to settle this.

You need to speak to HMRC, explain what you have done with their money and hope that you can agree something with them. Again - you'll need to know what you have done with their money, so you can explain how you're going to get it back for them. If it's been paid out to you personally, then you need to repay it.

Originally posted by bstone73 View Post

With an income of £10200 per month, starting this month - What will be the best solution to negotiate with HRMC or is there other solutions to this 'big' problem.

Separate the personal and the corporate debt - if that means that you have to recall a loan made to yourself, then as a director that's what you need to do. Sort out the company debt so you then know what's available to you personally - because if you don't and HMRC shut down the company then you aren't going to get any income personally.

Then work out how you're going to pay yourself enough to pay the tax bill. Sounds like you'll be paying back for a while, though - but if you can get into this much trouble when you earn £100k a year, then I dread to think what you've done with the money.

**cojak** · 14 December 2015, 18:15

..and then either get an accountant or use an umbrella, to make sure this doesn't happen again.

I don't believe either would have allowed you to get into this mess had you used them.

**northernladuk** · 14 December 2015, 18:19

Don't forget to factor the tax liabilities on that income of 10k...

Not all of it is available to spend........ anymore.

**LondonManc** · 14 December 2015, 18:39

Originally posted by cojak View Post

..and then either get an accountant or use an umbrella, to make sure this doesn't happen again.

I don't believe either would have allowed you to get into this mess had you used them.

+1

Get an accountant asap.

**Alan @ BroomeAffinity** · 14 December 2015, 18:43

Originally posted by LondonManc View Post

+1

Get an accountant asap.

+2.

Or go umbrella. It seems you can't be trusted to look after the tax man's money.

**northernladuk** · 14 December 2015, 19:15

Originally posted by Alan @ BroomeAffinity View Post

+2.

Or go umbrella. It seems you can't be trusted to look after the tax man's money.

At least someone has nailed it.

**centurian** · 14 December 2015, 19:24

Originally posted by Alan @ BroomeAffinity View Post

+2.

Or go umbrella. It seems you can't be trusted to look after the tax man's money.

And while HMRC will often use the "it wasn't your money in the first place" mantra - when you are putting money through a company, there is a grain of truth to it.

The money in the company doesn't belong to you, even if you are the sole shareholder and director. It belongs to the company. You can only receive funds via a loan (which is heavily restricted for directors), or disbursements after liabilities have been covered, which includes amounts to HMRC.

Urgent advice: HMRC liabilities