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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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My son has a major problem with his tax. 8 years ago

Customer Question

Hi. My son has a major problem with his tax. 8 years ago he was working with me as a self employed kitchen fitter but I became ill with cancer and he was unable to continue so found alternative work. He was still self employed but unfortunately failed to fill out any tax returns. At one point he became unemployed and believed the job centre had informed Inland Revenue he was no longer self employed which they had not. Following unemployment he found a regular employed job but IR still had him as self employed. He has outstanding tax returns for 7 years four of which was mostly self employed. The tax office have now caught up with him and have issued fines for non returns of over £5000. He does not have the records to enable him to fill out the self employed returns so he has know way of knowing what tax he might owe on top of the fines. My best guess would probably be about £12000 but I assume there would be interest and fines on top of that. He has no assets whatsoever and no way to pay any of this as he is only earning enough to survive. He is considering bankruptcy but because his debts are unclear he is not sure what to do for the best. I and he realise that this is totally his fault but if you can give us some advice I would very much appreciate it as the worry is now making him quite ill. Thanks. Rob
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, Rob, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with youir question. Your son will have to make his peace with HMRC, make returns and enter into some payment schedule he can afford. Bankruptcy is an alternative, if drastic, solution and he would be well advised to consult the local Citizens' Advice Bureau as the often have professionals on tap who could help him through the initial process at no cost. Bankruptcy would, of course, wipe the slate clean. I am trying not to be flippant or off hand, but in the circumstances bankruptcy may be the best solution. The stigma of bankruptcy has long gone. I do hope that I have shed some light on your son's situation.
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Customer: replied 1 year ago.
Hi Keith. Many thanks for that. This is what I thought. He has asked the IR debt manager for an overall figure he owes but of course they do not know how much tax he owes. If he declares bankruptcy how do they know how much he owes if he cannot do his returns with the lack of records? Or does this not matter? Rob
Expert:  bigduckontax replied 1 year ago.
Please remember Rob that the Inland Revenue ceased to exist some years ago with an amalgamation with HM Customs and Excise to form HMRC. The first problem is that it costs about 800 quid just to declare bankruptcy. The Gov UK web site points a debtor towards eithe the Citizens' Advice Bureau (CAB) or the Money Advice Service. The latter's advice can be found here: https://www.moneyadviceservice.org.uk/en/articles/options-for-clearing-your-debts-england-and-wales His best port of call is the CAB. Although I did bankruptcy in my professional examinations years ago I am not a Licenced Insolvency Practitioner. The CAB are pretty sure to have one on tap.
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.
Expert:  bigduckontax replied 1 year ago.
And your kind bonus.
Customer: replied 1 year ago.
Many thanks for your help Keith.
Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance. I am so sorry that I could not be more forthcoming. The best of luck to your son as he battles with his problem.

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