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Her Majesty’s Revenue and Customs (HMRC) oversees various tax-related debts, including VAT, National Insurance, and income tax arrears. Timely resolution of these debts is crucial, as they are classified as ‘priority debts’, subject to severe consequences such as court action, bailiffs, and, in extreme cases, imprisonment.
Taking control of HMRC debts is possible, even if it feels overwhelming at first. While HMRC calculations are usually reliable, it’s wise to double-check what you owe. Keeping accurate income, detailed expense records, and checking correspondence helps prevent mistakes.
Creating a budget is key to managing debt. Begin by assessing personal monthly business income and essential outgoings, including mortgage or rent, utilities, and food expenses. By taking out essential expenses from your income, you can see what’s available for debt repayment.
Talking to HMRC is really important. You can set up a payment plan based on what you can afford. Although they usually aim to settle debts within the year, it’s perfectly okay to agree on affordable payments that suit your finances.
Stay connected with HMRC by updating your contact info and occasionally making extra payments. This helps maintain a positive relationship and can reduce the risk of penalties.
HMRC acts quickly if payments are missed. Setting up a Time to Pay arrangement can help you avoid serious consequences, like court action or bankruptcy. If payments aren’t made, HMRC may take legal steps such as County Court Judgements or bankruptcy proceedings.
Various UK charities offer assistance with HMRC debts. Organisations like Business Debtline, Citizens Advice, and TaxAid provide valuable guidance, supporting you to deal with HMRC debts effectively.
Delaying payments will only further increase HMRC debt issues. Contacting them promptly and sticking to your agreed plan can help to prevent complications and protect your finances.
Struggling with debt is never easy, and you might not know where to go for confidential debt advice. That’s where we come in. My Debt Plan is dedicated to helping people deal with serious debt.
Tell us about your current debts and one of our experienced and friendly advisors can help you get the ball rolling.
Dependant on your circumstances and financial situation, we'll let you know if an IVA is a potential solution for you.
If you qualify for an IVA, we will take the necessary steps to set up and arrange this for you.
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Credit Score Pop Up Wording : An Individual Voluntary Arrangement (IVA) is a formal agreement with creditors to repay a portion of your debts over time, but it does have an impact on your credit score and it will be difficult to obtain further credit whilst on an IVA. Once an IVA is approved, it is recorded on your credit report and will typically remain there for six years from the date it starts.
However, it’s important to note this is the case for most debt solutions and your credit score will likely already have been affected by being in debt in the first place.
Once your IVA is complete you will get a fresh start to begin rebuilding your credit rating.
IVA costs are charged for the preparation of your proposal and the administration of the arrangement for the full term (usually 5 years) these costs are charged from the monthly contributions you make into the IVA and are not in addition. Costs will only be recovered on approval of your arrangement and once you commence making payments to it. The fees for preparation of the proposal to creditors and calling the meeting for creditors to vote on its approval are called nominees fees, the fees for running the arrangement once approved are called supervisors fees. There are also some expenses incurred in the running of the arrangement such as the registration fee and the statutory insurance that needs to be taken by law, these are called disbursements. For our arrangements, the total of all of these is £3,650 although this may be adjusted by creditors when they vote on whether to accept. No matter what the end total of costs come to, you can be rest assured that these will be taken from the monthly payment we agree with you.
