Client can’t pay their tax bill – they’d need to be “quackers” to do nothing
HMRC’s current marketing campaign features ducks “pecking away” at taxpayers by way of niggle to complete their self-assessment tax return (“SATR”) before the deadline of 31 January 2018. Instead of quacking, the duck in the advert repeats the word “tax”.
What goes unsaid is they will also have to pay any tax liability arising on the return by that same deadline.
Any failure to pay the tax liability will result in an immediate penalty with interest. Where a liability remains unpaid for any material length of time, HMRC will petition for the bankruptcy of the individual with little hesitation.
By definition; if you are unable to pay your tax bill by the due date you are insolvent. Therefore, a court will declare you bankrupt regardless of what other (non-cash) assets you may have.
There are many reasons why someone might be unable to raise the funds to pay their tax bill. Should a client find themselves in this situation, it is vital they immediately review their options and avoid being declared bankrupt needlessly.
Gibson Hewitt has an established relationship with the officers at HMRC who deal with insolvent individuals.
Often, the problem is a matter of timing where an asset needs to be sold to enable the tax bill to be paid. Gibson Hewitt can negotiate with HMRC on your client’s behalf so they have the required additional time. These negotiations are bespoke as no two sets of circumstances are the same.
These negotiations can be formalised into an Individual Voluntary Arrangement, (“IVA”), or perhaps left on a more informal footing if more suited to the client’s circumstances. We will be able to advise on the most appropriate option after an initial FREE consultation with no obligation.
Phone Lynn Gibson on 01932 336149 or 0800 195 58 58 to arrange a free meeting. The sooner we begin a dialogue with HMRC, the more flexible they tend to be.