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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Theoretically lets say you didnt file your accounts to HMRC

Customer Question

Theoretically lets say you didn't file your accounts to HMRC and ended up getting a major penalty for not submitting returns.

Let's also say, the amount is so high that no matter what, you can't afford to pay it back.

Does the HMRC take this into account and wipe/clear the fine or would they force you into bankruptcy?
Submitted: 4 years ago.
Category: Tax
Expert:  TonyTax replied 4 years ago.

Every case is different but HMRC is not in the habit of waiving tax penalties simply because an individual cannot pay them. That would destroy the integrity of the system and everybody would want the same treatment. If the individual has assets, HMRC may go after them though it would be less likely to go as far as bankruptcy in my experience if there was no tax unpaid.

If the tax office did go for bankruptcy, it would be up to the courts to decide whether to allow the action to proceed or not. It would be up to the taxpayer to make a case to be given time to pay the penalties.

I hope this helps but let me know if you have any further questions.