Got in a spot of bother

[jam_the_doughnut]

Ran an LTD providing IT services as a contractor from 11/14 finishing my last job in 11/15

Did and paid my first self assessment in January and have just filed my corporation tax financial statement covering this period.

The trouble is I won't be able to fully pay the £3000 tax bill by the August deadline.

I am actually in the process of shutting my business as I have moved back into employed work, but unfortunately some problems between getting a job and no income from the business meant I had to dip into my savings for tax.

The man at the BPSS was slightly cold delivering the verdict that no Time To Pay scheme would be considered and I would just have to pay the interest on anything I owe at a 3.5% per annum charged at a daily rate.

I guess that's fair enough and my problem but what else can I do?

I did explain to him that I am willing to pay, and it shouldn't take me too long as I earn a decent wage now, but he was unmoved.

Any help / ideas appreciated.

I may be able to ask the bank for a loan at the last resort, but not sure if I would be accepted.

 

[StevensOnln1]

How much could you pay by August and how long would it take you to pay the rest?

 

[jam_the_doughnut]

£500 and the same amount thereafter per month until the debt is paid.

The amount is slightly over £3000 so call it fully paid up in 7 months.

 

[StevensOnln1]

I'd just start making the £500 per month payments. It will take a while before HMRC start seriously chasing you and by then you'll have shown that you are tackling the debt and making regular payments towards it. Taking out a loan or using a credit card to pay will cost you a lot more in interest than 3.5%.

 

[jam_the_doughnut]

I'd just start making the £500 per month payments. It will take a while before HMRC start seriously chasing you and by then you'll have shown that you are tackling the debt and making regular payments towards it.

I did think about that, but wanted to make sure that because this is corporation debt, that it would not have any negative effect on my personal credit file

 

[Newchodge]

If the business is dissolved the debt dies with it. If the company cannot pay the debt there is, currently, no reason why you should.

 

[jam_the_doughnut]

Not dissolved, just stopped operations and no corporate income since mid November 2015.

Didn't think I could dissolve with outstanding tax but did think it was possible to defer tax payment for at least 6 months.

Anyway, not trying to get out of paying, just thought HMRC would give me some options since I am willing, just that payment will take a bit longer.

 

[tony84]

Can you not get a 0% money transfer credit card (money transfer, not balance transfer).

A quick search...
http://uk.virginmoney.com/virgin/credit-cards/money-transfer-cards/
As an example.

You need to check if you are likely to get accepted or not.

 

[Newchodge]

Have a look at the Spongebob plan in Insolvency forum

 

[StevensOnln1]

I did think about that, but wanted to make sure that because this is corporation debt, that it would not have any negative effect on my personal credit file

HMRC do not report details of tax debts to credit reference agencies (or anyone else).

 

[JEREMY HAWKE]

Have a look at the Spongebob plan in Insolvency forum

Newchodge is on the same wavelength as me I dont know what the hell everybody else is doing steering you in to paying a company debt that you are not liable for . Why advise the OP to pay this debt when he or she is not personally liable .
If your limited company is unable to pay the debt then it is insolvent and can not pay this debt . Even if you personally were a billionaire you would still not be liable for this debt !

As newchodge has said search the spongebob plan this has helped many people and you dont need to pay your own money out on this the law protects you

 

[UK Contractor Accountant]

They are not paying debts personally- they are just repaying their loan back to the company that they took out in the first place.

 

[JEREMY HAWKE]

They are not paying debts personally- they are just repaying their loan back to the company that they took out in the first place.

He had to dip into his savings for tax .Well he should have drawn that as salary (not a dividend or loan )and then he would have only been liable for personal tax on 3K !!!

Are HMRC going to spend a considerable amount of money investigating where 3k went ? for a company that did hardly any trade in a short amount of time .As an accountant you wont answer that accurately and that is understandable

 

[UK Contractor Accountant]

Correct-That's why it is important to document correctly your drawings from the company at the time you take the money and not leave it the year end to fudge up with dividends.

 

[Mark T Jones]

Can you not get a 0% money transfer credit card (money transfer, not balance transfer).

A quick search...
http://uk.virginmoney.com/virgin/credit-cards/money-transfer-cards/
As an example.

You need to check if you are likely to get accepted or not.

The potential issue here is that they are turning business debt into personal debt.

The key decision appears to be whether the op wants to keep their business for a reason.

 

[JEREMY HAWKE]

Very good point Mark
Yes he may owe his 3k loan but the debt that the company has to the revenue is a separate issue It is a debt the company owes to the revenue and the company is insolvent unless the OP plans a cash injection to take it on . So the OP is not liable for this debt to the revenue and does not have to pay it .

 

[japancool]

I don't see though where he said his DLA was overdrawn?