Hello, I'm after some advice and opinions, myself and my wife owe between us 47000 and are currently struggling to keep up the repayments for the 2 credit cards and three bank loans we have but the main issue we have about going down the IVA route is that for a long time between us we have earned a fairly substansial amount of cash in hand and i buy and sell cars to make extra cash!
we are on paper currently paying out each month around 600 pounds more than we earn.
can anyone offer any ideas what the hell we can do other than plan for an all expenses holiday at her majesty's pleasure?
thanks
Andy4
Hey andy, welcome to the forum. You'll either have to declare this money to the tax man and include it as income on your IVA or stop it before you get caught. I can't give you legal advice on the implications of what you are doing but there are plenty of IPs on here that can give you debt advice so stick around.
the main issue is looking to the future but when you have supplemented your income for so long its a worry.
we are now not earning enough to pay our outgoings but the bit that concerns us is if we go down this route how many questions will be asked about how we have survived for so long[:(]
If you are not declaring all of your income to HMRC then you are breaking the law. If you really want to sort out your finances, you would need to work out how much undeclared income there is and make a voluntary declaration to HMRC - which will result in penalties and surcharges being levied against you. This debt could be included in a subsequent insolvency, but beware that HMRC occasionally take a moralistic view of debt avoidance, and could well reject any proposals you have to make.
i understand the gravity of the situation but the question is how far do you go back because if i had to declare all of it i may aswell sign on now and stop paying everything and wait for it to implode because unlike alot of people our joint wages are not massive and with three kids and living in a rural location we spend lot on fuel and with a very conservative lifestyle we have survived for quite a few years getting by but as with alot of people with kids my wifes wage has dropped and qithe the wya businesses are at the momentmy wages have dropped (not by much about 150 pcm between us) and this ha removed the buffer we relied upon to survive!
i cant really see where we can go next but i was hoping jail wasnt one of the options!!!
That is potentially £90,000 worth of undeclared income with a tax bill of possibly £30,000 or more. I suggest that you find yourself a good accountant, and take advice from them directly - but do be aware that professional such as accountants and insolvency practitioners are duty bound to report incidents of suspected tax evasion or avoidance under Money Laundering Regulations.
Yes OK Melanie is right it is a failure to declare but I would think HMRC are more likely just to pursue any tax owing ?
It seems a shame that any professional you approach to discuss this is now obliged to shop you - you might be better off talking to Citizens Advice who have a very strong code of confidentiality.
However I doubt anyone would look too closely at how you were able to 'manage' before - you might have had help from family, etc or lived a very frugal lifestyle.
Best Regards
Last edited by go_4_broke on Tue Nov 04, 2008 1:20 am, edited 1 time in total.
I am sure that if you came forward and volunteered the info to HMRC they would look at it far more favourably than if you left it until you were caught. I would have thought prison extremely unlikely if you did this.
I would suggest that you make the decision to deal with the problem whatever the consequences and then find a good accountant that specialises in tax investigations to handle dealing with HMRC on your behalf.
When the liability has been established you could then speak to an IP to put forward an IVA.
If HMRC were to reject the IVA you would be looking at bankruptcy. Either way getting this sorted will be much better for you long term than living with the worry of what might happen.
Most if not all tax offences can lead to a criminal prosecution - so yes it is a criminal offence. Howver if you come"clean" and make restitution that is agreeable with HMC&E then there won't be a criminal prosecution. See sound professional advice from a firm of Chartered Accountants who deal with tax evasion cases. Good luck.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
It appears that if you do what David suggests and approach a professional with the right magic words they are NOT necessarily obliged to shop you. The magic words are 'I want legal advice about my tax position'. A typical quote I found:
“individuals who may be guilty of tax evasion [can] approach their chartered accountant or tax adviser for [legal] advice, for example on where they stand under the law or what they should do, in the knowledge that the information will not be passed to SOCA by way of a money laundering SAR”.
Best Regards
Last edited by go_4_broke on Wed Nov 05, 2008 3:04 pm, edited 1 time in total.
Only obliged to report to SOCA if they identify fraud whilst doing their job. Somebody coming in and saying I have done wrong and want to pay the taxes isn't fraud so won't be reported. (As it kinda is submitting the return) The Revenue in this instance would probably only charge interest on the outstanding debt, they're far too busy taking on the big fish.
