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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4797
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Hi, I am in a difficult situation at the moment, I registered

Customer Question


I am in a difficult situation at the moment, I registered for VAT very late and had to recently do VAT returns for the past 20 months. I sell and on ebay and my total sales were £500,000. My vat bill came to £17,000 which was a lot more than I had expected due to missing invoices and poor record keeping.

The VAT guys are demanding the money in full I have only paid them what I could which was £1000 with a request to pay them £1000 every month which they have refused.

I would really appreciate any help, I am also a sole trader and would appreciate any advice on how I can help my situation.

Submitted: 4 years ago.
Category: Tax
Expert:  bigduckontax replied 4 years ago.
Hello, I'm Keith and happy to help you with your question.

Here is HMRC's own advice on the subject, rather at variance with the treatment you are receiving, but par for the course.

'How we can help you

If you still won't be able to make your payment it's important that you contact HMRC right away. Who you should contact depends on your particular circumstances.

If this is the first time you've had a payment problem, and you've not contacted HMRC already, please contact the Business Payment Support Service. If you're already in contact with HMRC about a payment problem, or already have an arrangement with them, contact the office that you have been dealing with already.

Find out more about the Business Payment Support Service

Important actions you should take

Making contact with HMRC is the most important action you should take, but you should also do the following as a matter of urgency:
Submit your VAT return on time, even if you can't pay the VAT.
Tell your bank and your financial advisor about the situation.
If you are paying by the online VAT Direct Debit service, contact your bank and ask them to stop the next payment.

Any surcharge or penalty is calculated on the amount outstanding at the due date, so even if you can't pay the full amount on time, pay as much as you can manage. This will reduce the surcharge and could even stop it altogether.'

Not particularly helpful in the light you your treatment to date. Just keep on as you are. They are unlikely to take you to court over this at this stage as the taxman is no longer a preferential creditor.