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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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HMRC has calculated estimated amount on self assessment

Resolved Question:

HMRC has calculated estimated amount on self assessment dating back from 2007 to 2012. There has now being a statuary demand made, and due to all the complexity involved since I left it very late, I have a home with a family and cannot afford to lose the home, can I come to a negotiated settlement, I have resigned myself to the fact I will have to pay, but I'm looking for negotiating to be able to pay over a time period, also I am trying to look for concessions on fines and penalties that was added, liability is £58,000
Submitted: 3 months ago.
Category: Tax
Expert:  Sam replied 3 months ago.

Hi

Thanks for your question - I am one of the UK tax experts here on Just Answer and am ex HMRC so can advsie you best how to proceed with this.

How much time has lapsed since the initial demands were made - and the issue of the Section 268 (1)(a) notice ?

However you need to contact HMRC immediately and if you are able to make a lump sum payment as a gesture of good will then they are more likely to agree a payment plan with the remaining debt and charges, However please note that interest will continue to accrue to any outstanding amounts.

Can you raise a loan or make a credit card payment - is there equity in the property?

Because any payment you make will work in your favour at this time but I am afraid there is no negotiating the settlement - even if the calculated amounts are not representative of the true position and unless they have over inflated (say based on the taxes due for the years leading up to 2007 then there is no challenging the figures they have used, however if they have over inflated the taxes they state are due from these earlier years then get your accountant to use that as the special relief application as HMRC do have the requirement to justify there figures on a basic level.

If your accountant is not able to manage this for you - then find a specialist accountant that deals with this near to you - but time IS of the essence

Thanks

Sam

Customer: replied 3 months ago.
Hi Sam,
Thanks for your response, they claim that those years have lapsed, and even if I provide actual figures from my accountant it's too late, is there any way they can come to some concessions on the amount, say waving some of the penalties, interest, if a payment is made. What is usually a time frame I can negotiate, and from what least of amount can I begin to present to initiate payment negotiations.I work as an IT contractor, at the moment I'm between contracts
Expert:  Sam replied 3 months ago.

Hi

Thanks for your response

No they will not amend the figures to actual income but if the amounts they have used are excessive estimations (when earlier years say 2005 and 2006) then they legally can be challenged on this.

No they will not waver the penalties or interest - only if the amount is amended (then it follows suit that these extra charges also are reduced)

You have 21 days from the date of the notice being served before bankruptcy is pursued to recover the debt. So you need to be getting in touch now and see whather they will afford you any extra time

You also need to raise what you can as a payment (as near to 2%% of the total debt owed is the optimum position) and then offer an affordable and sustainable payment plan to clear within optimum 12 month period - and within the next few days

Then you can challenge the amounts and hope there is scope to argue this further, this is why I urge you to seek a specialist accountant to manage this for you, they can use the law to argue the points for you

Let me know if I can assist further - or if you have enough to proceed, it would be appreciated if you could rate me for the level of service I have provided (or click accept)

Thanks

Sam

Customer: replied 3 months ago.
Thanks
So how should I approach this with HMRC, should I send the 6.4 form to the court, then how do I proceed with the negotiation with HMRC, offer the 2%, in a verbal, or written format, also what tone can I use
Expert:  Sam replied 3 months ago.

Hi

Thanks for your response

That should have read 25% of the debt not 2% many apologies

This is why you will need a local accountant - as I have no access to your papers, or to try and establish the right position to take , or the appropriate reasons this should be set aside and this site can only give information or help you make an informed decision within your situation rather than direct representation, which I am sure you can appreciate.

Thanks

Sam

Customer: replied 3 months ago.
Hi Sam,
Apologies, as you can understand it has been hectic, what are the options of solicitors who specialise in bankruptcy issue to do with HMRC on behalf of clients, I am especially worried not to lose my home, as I have a child, or should I speak directly to HMRC myself with possible idea of the 25% payment, what I'm worried about is there willingness to entertain a payment option when all I think is they are determined to get my home for the whole payment quickly.
Expert:  Sam replied 3 months ago.

HI

You do not want a solicitor - but an accountant that specialises in HMRC debt and at this stage the threat of insolvency and you advsie that the amounts asked for are wrong and it may be they have been over estimated - which an accountant can help look into for you but , of course it would make sense to talk to HMRC in the meantime as time is of the essence here - but make sure when you speak with them you at least either

1) have an appointment lined up with someone IF this is the route you choose to take. OR if

2)you are to mananage this on your own in which case make sure you have a payment to make and a proposal re future payments

HMRC do not want your home for a quick payment - they just want payment

I am not sure what you mean when you say "what are the options of solicitors who specialise in bankruptcy"

Let you know if you need anything else, but it would be appreciated if you could rate me for the level of service I have provided or click accept.

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13707
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Customer: replied 3 months ago.
Hi Sam,Thank you so much, I think you've got all the angles covered, very good advice, I have clearer idea on how to approach this now, based on your adviceThanks
Customer: replied 3 months ago.
Hi Sam,
Going over my earnings in those years estimated for, I have discovered years where the estimated amount has been provided that I was not even earning for those periods, although I have not done the self assessment for those years, was living on my savings, in light of this huge amount where a statutory demand has been made for, how do I get concession for this, any way to prevent someone paying over and above the true legitimate tax on an earning. I know we are at the statutory demand stage but how can I make them understand I'm paying way over what they are asking for.
Expert:  Sam replied 3 months ago.

Hi

Thanks for your furtehr question

You cannot change the years on which HMRC have estimated on - as these were created in your absence to file tax returns so I am afrais in themselves you have to accept the figurework used even if they are greater than they should have been due to absences of work etc

BUT if the estimations used (which should have been created using previous tax years as a guide, IF, these are excessive when compared with those previous years - then you have grounds for appeal.

So for example. lets say your earnings for 2005 were £18,000 and for 2006 were £17,500 then you would expect the estimate for 2007 to be around £18,000 but if HMRC then estimated £40,000 - you can see this would be an excessive estimate. Its on that basis you would have grounds for appeal only

You cannot appeal if they estimated £18,000 but for that year you only earned £10,000 as it was then up to you to report the correct position but for them to have estimated based on the example above - would not be excessive compared to earlier years earnings.

I hope that's clearer

Thanks

Sam

Customer: replied 3 months ago.
Hi Sam,Thanks, ***** ***** tax was about paying from what you earned, not what you did not tell them you earned, how does the special relief work, I am told it may be an option I look at, as this amount is just so highThanks
Expert:  Sam replied 3 months ago.

Hi

It is, but as you had failed to fill the forms in at the appropriate time and still had not three years later AND did not appeal against the estimates at the time, you have now run out of time to appeal them due to that incorrect information.

You can only appeal against any excessive use of the figures, which are measured against previous years returns/assessments which are then deemed to be excessive

I am not sure who told you that appealing against them not using the information available was an option for appeal - did you only have income from employment then ? Tell me what sources of income you had then and now.

I have explained how the special relief works - as above if HMRC have made excessive use of estimations - that at this stage (based on what you have told me is the ONLY route) however ehrn you advsie me more about your sources of income I can advsie further and see if we have any other options you can consider.

Thanks

Sam

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