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AIBU?

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Original poster

To have just come home and cried

26 replies

2ndAugust · 03/01/2019 16:09

My business is failing miserably, online retail, which I spent 5 years building up and just bought a house on the strength of, relocating area in the process. My accountant has messed up, meaning I owe £6k this month and a further £3k in July.

My husband works shifts, no pattern to them ata all, so I have had to take the only job I can to keep our heads above water, cleaning.

My father is terminally ill, so I need to be available to my parents a fair bit too.

I have done cleaning before, but on my first day I have worked my self mad, for the grand sum of £31 after tax. I have just walked through the door and cried my eyes out. Poor DS, knows how disappointed I am about the business failing, but hate him to see me upset. Will have to carry on with it in the short term but just feel pissed off today.

OP posts:
OddBoots · 03/01/2019 16:15

Oh I am sorry, it sounds like a huge amount of pressure on you, yanbu. To whom do you owe the money? Is there a way of spreading it out?

Original poster
2ndAugust · 03/01/2019 16:24

HMRC. @oddboots, I can spread it out but I hate having it hanging over my head for too long.

Am so furious with my ex accountant for giving me the wrong information, and also need to find a new accountant to try to rectify the mess he has left me in. It’s foing to take a lot of cleaning hours to pay it all off!!

OP posts:
ShalomJackie · 03/01/2019 16:25

I m assuming as payments are due in January and July it is your tax payments. Why do you think the accountant has messed up? if he has been negligent in some way then you may have a claim against him. If it is because you haven't been telling him all details of your income etc if there are changes to them then it won't be his fault.

Can you make the payments? If not get in touch with HMRC and ask them to adjust your tax code at your new job so that you don't end having court proceedings issued against you.

Duchessgummybuns · 03/01/2019 16:25

Do you owe HMRC back taxes? If so call them and ask to sort a payment plan, you can’t be expected to come up with £1000s at the drop of a hat. Quite often they’d rather you paid something than having to go down the legal route in my experience

cjt110 · 03/01/2019 16:37

Can you take action against the incorrect advice upon which you relied?

thecatneuterer · 03/01/2019 16:38

I'm confused. So the business failing and the owing back taxes must be two separate issues. The business was obviously reasonably successful until quite recently, otherwise you wouldn't owe that much tax. Has something suddenly happened to make it not a goer?

DarlingNikita · 03/01/2019 16:38

Can you take action against the incorrect advice upon which you relied?

Yep, look into this. And ask HMRC for a payment plan. They can be surprisingly human and helpful.

grumiosmum · 03/01/2019 16:39

Is it possible that one of your tax payments is an advance payment on account?

If your earnings are going to be much lower going forwards, you should be able to get this reduced.

Ask another accountant.

Jenny17 · 03/01/2019 16:44

If you owe those kind of payments is because your business was doing well or is doing well.

If your accountant has messed up you need to get a new one. You can get payments reduced but beware if you do this and it's found you owe money then there will be fines and penalties.

Toooldtocareanymore · 03/01/2019 16:48

oh I am sorry, really I am , especially about your dad, and I know its not great for your ds to see you that way but if anyone deserves a cry you do, tomorrow i'm sure you'll feel stronger.

5 years is a lot if time to put into a business, and I know overall the figures for last years retailers are not great, but maybe its not failing as badly as you think. I'm sure bank looked at stuff before you could buy your new home, its January famous for those blues, and its hard working like mad for so little return. Its all pretty shitty sorry.

It sounds like the tax man will have to wait but that's really just the tip of the iceberg now , that's something you can sort in due course, already you have made an action plan by getting the new job, and i'm sure you will talk to tax people as soon as you can.

Have you a lot of stock?

Your accountant was he a sole trader? just wondering if he has colleagues that can help sort out this mess.

OneStepMoreFun · 03/01/2019 16:50

Contact HMRC. They are unbelievably nice and helpful and knowledgable. Not what you'd expect at all. Explain the accountant's mess-up and that business has been very bad recently. They must know that loads of people have been affected recently - not just big high street businesses. As long as you have a plan to pay it off, they'll be kind.

Your business must have gone well at first. You were doing something right. Take a step back and see what changes you could make to get it back on its feet. Are there any entrepreneur mentor schemes near you? Or local small business grants etc. Look for ways to get you back on track.

Pachyderm1 · 03/01/2019 16:51

I can spread it out but I hate having it hanging over my head for too long

It seems daft to lose your business over this though. Surely it’s better to spread it out and save the business?

If your accountant was negligent you could try pursuing a recovery against him or her. Your new accountant might be able to give a broad view on this and help you decide whether it’s worth contacting a solicitor.

busybarbara · 03/01/2019 16:59

Since you owe another £3K in July, it seems you have payments on account due. Which means £3K of the £6K owed this month are also part of the payments on account.

So here's what you do. When you file your tax return (if you've already done it there's a form you can fill out, I forget the reference number) you can reduce payments owned on account if you THINK your future tax payments will be lower. If you guess too low, HMRC reserve the right to charge you interest and penalties next year but I've never heard of this actually happening.

So just reduce your payments on account to sod all, leaving you with £3K and change to pay this month and then next to nothing in July. £3K isn't necessarily easy to find either but easier than £9K total in the next 6 months..

Icecreamenthusiast · 03/01/2019 17:07

As Pp has suggested I agree making a claim to reduce your 18-19 payments on account is a good idea if your business has taken a downturn.

Original poster
2ndAugust · 03/01/2019 17:08

Thanks so much for taking the time to reply, I had two very good years, hence some of this is upfront payment for next year. Since June sales have dropped by about 50%. I have a little put aside to buy more stock and not much stock left as it stands today, maybe £2ks worth.

My accountant is retiring himself due to ill health, I don’t feel I have any come back with him, nor would I want to cause him any further distress as I know he’s having a hard time if it.

He wrote me a letter saying you have to pay three amounts, with three dates next to them, they are all due this month not spaced out over a year as I was led to believe. He simply made an error.

I am going to try to keep the business going, so I will make a plan with HMRC. It’s been an awful shock (couple of weeks before Christmas)

Just to give you an idea my profits were itro £2k per month on average, have dropped to £700-£1k recently, and since November nearer £500! We have waited so long to buy a house, which incidentally is a major doer upper!! It’s all just getting on top of me a bit.

DH is fantastic and positive about the future of the business but I don’t know, I didn’t see it coming and it’s knocked me for six I suppose.

OP posts:
Original poster
2ndAugust · 03/01/2019 17:09

Thank you for the info on reducing the payments on account, it is something I have been looking into and have found a new accountant to help me try to do this.

OP posts:
OneStepMoreFun · 03/01/2019 17:11

OP, I had a very good year and was suddenly whacked with a massive nbill in advance for the next year. I just contacted HMRC to tell them that it was a freak year and I was forecasting a big drop (correctly). They immediately adjusted my tax back to what it had been. No questions at all. Very helpful.

NoSquirrels · 03/01/2019 17:12

Any idea why the business has dried up so quickly? New competitors in the market, do you need to reprice, refocus the website...?

Spaghettijumper · 03/01/2019 17:16

That's a big drop. What happened?

Jamiefraserskilt · 03/01/2019 17:16

Another one for speaking to them. I had a bumper year one then a pants year two. Got stung. No income. Huge tax bill which i could pay year one's bit not the on account amount. Set up payment plan. Job done. Once tax goes digital it makes it easier as you pay as you go. They would rather have something than nothing. Best of luck to you, OP

JennyHolzersGhost · 03/01/2019 17:27

HMRC are used to adjusting tax assessments to take changes in business conditions into account OP and they’re also used to reproducing repayments when needed. So don’t let this kill your business !

Find a new accountant. Go through the official accreditation body to find one in your area. Get them to sort the tax situation out with HMRC. Meanwhile have a look at what has caused that drop in revenue. Can it be addressed ?

Original poster
2ndAugust · 03/01/2019 17:27

Can’t really put my finger on whats happened, lots of competition, my main customer base is students, they seem to spending less than last year. Have tried to diversify product wise but nothing working very well. Profit margins are pretty small, it’s volume of sales rather than high profit. @onestepmorefun Thankyou, I will do the same when I contact them.

OP posts:
JennyHolzersGhost · 03/01/2019 17:27

Reprofiling not reproducing ffs autocorrect !

AFistfulofDolores1 · 03/01/2019 17:41

I was in a similar situation with HMRC, OP, and was completely honest with them: called and told them I couldn't pay, and could I repay what I owed them in instalments. They were happy with that, and even lowered the monthly amount when I told them it was too high.

kateandme · 03/01/2019 17:45

really sorry your going through this op.
I cant offer any better advice that pp posters but I wanted to say im sorry.
don't give up.
and its ok to cry.
keep feeling the enfolding of your family.having that love is something to take grasp in in times like this.