Husband not been paying tax for years

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I'm so worried and scared. Over a year ago two debt collectors came to our door and handed me a letter addressed to my husband. I opened it and it said we owed approx £500k to the taxman. I nearly collapsed.

When my husband came home I confronted him and he basically broke down saying he hadn't been paying tax on his Ltd company for about 5 years. He'd liquidised his company without my knowledge and taken me off as Company Secretary presumably so I wouldn't find out and to extricate me from any financial liability. We had to get a tax lawyer to negotiate on our behalf with the debt collectors and after many months of wrangling, my husband told me it was £64k we owed which we could put our savings towards and also set up a direct debit and pay the rest monthly.

Fast forward a year, I had two debt collectors standing at my front door. It turns out my husband has been lying about the amount owed...it's in actual fact £150k. I'm horrified, my heart's racing as I'm writing this. He told me over the phone he'd used £30k of our son's trust fund money towards it. He told me he's incapable of saying no to me (?!) and he knows he's got emotional problems.

I don't understand any of this...I'm in my 50s, yes, I like nice things (who doesn't) but never overspent in terms of the money that's in our account and was surplus after all bills are paid. He didn't come home last night, he's too ashamed and embarrassed and keeps telling me he's no good and I deserve better. I've been with this man for over 30 years and can't imagine life without him, although I massively resent him at this point.

I found out he'd taken his watch (a present for his 50th) to a pawnbroker to get a £1,500 per loan against the watch. He said it was to pay off the rest owed to the tax lawyer. I asked (shouted) why the hell did he not come to me as I'd managed to put some money aside. Again, he was too embarrassed and said he just wanted it sorted and out the way. I ended up giving him over £2k to get the watch back.

I'm worried sick. How on earth do I deal with this without knowing whether he's lying or not? I don't have access to his business account because I'm not company secretary. I have access to everything else (I think?).

I'm mostly disgusted at my son's trust fund. He's 21, and it was meant to be for a down payment on a flat at some point. Now there's nothing. My son's now aware of this and thinks I should leave his dad as he can't be trusted. What do you think? Any advice would be extremely welcome.

Are directors personally liable or responsible for company debts?
A company director can be held personally liable for the debts of their company in certain instances. Any debts belonging to the company which have been secured with a personal guarantee will need to be repaid by the director should the company become insolvent and subsequently enter liquidation. Directors can also be held liable for company debts should he or she be found guilty of misconduct or fraud.

For anyone who keeps insisting that a LTD company means Directors have no personal liability

How would you support your husband now? So far he has been contributing to this lifestyle you both had been enjoying. He helped you with your addiction, you say he is a good man. So you know better than us all. You make a plan with him, ask him to share all financial information, go to accountant with him. It’s just 2 or 3 of you, you can downsize from 8 bedrooms to 3/4 bedrooms home. Porsche can be replaced with a cheaper car. From this extra money repay the taxes, put money in son’s trust fund.
Then tell your dh you want to be involved in the business activities even if your name is not on papers or can he hire you?
you will learn something and will gain confidence and who knows can start own small business.

You put in your post your were Company Secretary. If your partner liquidated the company with outstanding liabilities, you need to get legal advice. One of the responsibilities of a Company Secretary is to ensure compliance with stuff like this.

Op,

The money problems can be fixed; your husband can earn and you could get a job as a cleaner (or start your own business).

What’s more worrying is the lying.

He has lied horrendously to you - but you’ve also been naive, perhaps?

As a priority, you need to go together to chat to a third person about your relationship and what got you here.

If there is still love there, and it sounds like there is, then this will be so worth it.

But you have to confront the lies together, and learn from it, together

Relationship counsellors near you can be found by searching the BACP website x

During a recent spell of no work (I'm self employed) I registered to do TA work (Teaching Assistant). You'll need to provide documents for verification purposes and undertake an enhanced DBS (costs about £60) but assuming everything is fine you should start getting work quickly. Pay will be low (about £88 per day, and set aside enough to cover your own tax as the agencies don't cover that) but as your son is an adult now I assume you will be free to work full time, 8.30am to 3.30pm. So in a short while you could be bringing home about £1,400 after tax which would surely be a great start.

That is a common misunderstanding. The shareholders have their liability limited to their investment, not the directors.

This is a good advice.

Good point.

I had a friend in a similar position.
Your position with him is actually quite strong. You'll need to see a solicitor to arrange it, as hers did.
But they were divorcing, and she said because of your mistakes, you are going to lose everything. Your debtors will come for you until you are penniless or you have paid back everything in full, on the other hand you can do the right thing and give me 50% as it should be, and whilst we're splitting assets you can pay back the £30k you took from DS.

That may be all that saves his relationship with DS tbh

Please don’t say these things. You are frightening the OP. The company is liquidated. The debt is now being collected. These are 2 different things.

But I think the OP needs to actually accept her part in this - given the timeline there is every chance that this started with her 1000-1500 per month addiction that he stopped putting money aside for tax and it spiralled from there

her addiction seems to cover around a 6 year period which is 100k right there and the fact she always spent the surplus

there is every chance her spending is part of this and that now whatever happens the house will need to be sold debts paid off and decisions made from there

My thoughts exactly

I think the thought of how this man could destroy you financially should be a bigger fear, OP.

You need to protect yourself financially and try to claw back the money he has stolen from your son.

I would not have given him £2k to redeem the watch. You need every penny you have.

You don’t fancy moving to a smaller house or continue trying to get any job when your husband-can you plead ignorance?- has defrauded the British tax payer? Poor you. Ignorance shouldn’t be blissful.

Right, so you're £150k in debt, you're mid-50s, you haven't worked for 20-odd years and are unemployable, you live in an 8-bed house and drive a Porsche - and all because your DH is a lying, irresponsible toad whose been lying to you for years and hasn't been paying any tax. You don't really want to downsize, but you're happy to get rid of the Porsche. Good luck OP! You're living in cloud cuckoo land and have been for years. No wonder you're in shock. Your whole life is a house of cards. The one I feel REALLY sorry for is your poor DS

I've not read every post so apologies if this has already been said but have you set up a repayment plan with HMRC? The bottom line is they want their money. If you can't pay it back at once they'd rather have some than none so will agree a payment plan. So long as you stick to the payment plan it will be fine, although obviously they will add interest to the outstanding balance.

Downsize the house, sell the car and get a cheap runaround, get a job (any job). You can’t afford to be fussy or snobby about new builds or Porsches anymore.

Yes, I'm worried sick about my husband's mental health. He said if was dead I'd get half a million but I don't want him to kill himself. I don't think he would. He's told me he'll do everything in his power to rectify this which probably means working abroad where the rates are higher.

This is a massive red flag OP and you are right to be worried. If he is talking about suicide then it needs to be taken seriously. He might ‘rectify’ things in his distorted way of thinking by attempting to or ending his life. He is under a lot of stress, you both are, and he needs help. Get him to see hiis GP who can refer to mental health services.

OP I feel for you hugely and also doubt MN is the place to get good advice and a hand hold.

why haven’t you got a charge against the house? This would be the simplest way to get it over and done with. I suspect the only reason they haven’t done it is because your DH was offering cash which of course they prefer.

take your time. Ignore all the stuff about getting your half in a divorce- you don’t think HMrC are that dumb surely 😂 and just take your time.

it’s not a quick process and it will probably go back to court. This is a brutal process and sadly those with money always come out on top, as you saw when you hired a tax lawyer last time.

your H will be enormously stressed. This is probably the most traumatic thing you both experienced. But in 5 years or so it will be over.

take your time. Marriage counselling etc is really unlikely to be effective in this chaos. Most professionals aren’t equipped to advise on this very niche and high pressure situations.

this isn’t a time for solutionising. Take your time getting over the shock x

https://www.gov.uk/guidance/what-will-happen-if-you-do-not-pay-your-tax-bill#hmrc-and-debt-collection-agencies

Proof. An easy Google search.

That's terrible, OP. What a terrible mess to land you in. And then to try to blame it on you liking nice things!

Your son has the correct level outrage. Listen to him.

People telling you to leave him etc, however, you would need to sell your house and consider where you are going to live. You say you don't work, so have you just been burying your head in the sand whilst happily spending hmrc's money? Not sure this is all on him tbh.

I don’t understand why you gave him £2k to get the watch out of hock - surely that should go towards the debt?? Or your son’s fund? Something else going on here…

As a Company Secretary you have to sign off accounts - so until he removed you as director you must have known something awry!

After reading your updates, I really can’t blame your DH too much.

You need to do a statement of affairs and take the advice on Money Saving Expert

https://www.moneysavingexpert.com/loans/debt-help-plan/

You need to increase your income as a household and decrease your expenses. I would urgently look for a job, you have commented a few times how you aren’t succeeding as you are nicely dressed. Are you aiming for the wrong positions? You need to get any job, whether that’s bar work or temping or a zero hours contract. You can upskill and do refresher courses as well but you need some income.

I would cancel any luxuries in your budget, sell what you can, return anything possible on credit cards, get a Vinted and a Facebook marketplace account and sell what you can.

Post on the debt free wannabe section of the Money Saving Expert forums, you will receive advice and support.

Whether you and your DH stay together or not, you two need open communication and I don’t think there will be an easy way out of this. You need to start with accepting this situation and realising that life was a bit of a fantasy. You need to accept that you and DH need to reign in your spending and focus on clearing the debt and sorting out your financial futures.

Have you got much in the pot for retirement and has your DH? It really sounds like you have been living well outside of your means and not using the money sensibly