Hi all, I have been scanning forums for a couple of months now and am shortly entering a short-term DMP. I am self-employed (Ltd Co) and need to sort out tax liabilities as I have been taking cash for at least a couple of years just to make the minimum payments on my debts.
My question is regarding HMR&C and how they react to IVA's - I have not reda much on any of the forums I have been to and only remember seeing a comment from Melanie that most of their IVA's that fail are down to HMR&C. My OH and I are very worried at present and any advice of experiences would be much appreciated.
Hi Cashclown and welcome to the Forum.
HMRC do accept IVAs but like most creditors they have their criteria. Compliance and not dividend is very important and if there are any outstanding returns you must get them submitted even if you do not have the money to pay them.
However, you state you are self employed[Ltd Co] which raises a number of issues. Firstly, if you are employed by your own company you are an employee and not self employed. The debts of the limited company are the company's and not yours but this also applies to the assets.
You need to take some advice to determine what debts are yours and which relate to the company. It is likely that there are personal as well as company liabilities.
Michael - many thanks for coming back so quickly. I do realise taht there will be separate liabilities - my OH and I are directors of the company and have guaranteed a loan on that too. I have been taking funds mostly as loans, but tere will be some personal and Co liability to HMR&C. It is the tax and NI that is the issue. I have already been advised that we are likely to be sdtruck off as directors and we understand this. However, we have been struggling to keep everything appearing "in order" to our children (almost 21 and 18) who still live at home.
The youngest has just taken A levels and is likely to go to university in September/October. We wanted to get to this point before everything came out and we finally confronted our debt problem that really began in earnest when our first was born and has got progressively worse since.
We realise that we have to do something now and we are just really woriied about HMR&C. We have approx.£75k of other debt in credit cards and overdrafts etc. From reading on here we are worried about two creditors - HMR&C as already explained and Lloyds who we bank with.
We just wanted some other experiences of dealing with these. We are attempoting to bring all returns up to date as you have recommended, but have never done this before as we were so worried about them then starting to collect the debts. So far they have been very quiet on the subject.
Just to say how useful and comforting this forum is and wish we had discovered it years ago instead of burying our heads ...
If your company is liquidated there will be a report sent to the Directors Disqualification Unit but it does not follow that you will be barred from being a director. Regardless, even if you are disqualified, you can operate as a sole trader and there are advantages to this.
It would be necessary to look at the company and see if it is solvent in addition to looking at yourselves as directors. If the company is liquidated would you be able to earn a living to meet your ongoing expenses? Could the company continue to trade given that the directors are insolvent and not the company? These are the sort of questions that need to be answered so you should get some free advice from an IP firm.
HMRC do reject a number of cases, but at a very helpful meeting I held recently with their Head of Insolvency, I was advised that they will happily accept cases where they see that the company's/businesses fortunes have changed, and that the debtor is putting their best offer forward.
Dealing with company directors and limited companies is no more difficult than dealing with an individual who has a full-time job, but they key is down to separating the limited company fro you as individuals and looking at both entities in their own right.
