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.

Yes, this in spades. Cut your cloth accordingly, as my mum loves to say.

With all due sympathy, I don't see how you could ever trust your husband again. So you might have to enter the next phase of your life in the knowledge that only you can be relied on to provide for yourself and your son.

The idea of a limited company is in the title. It is intended to limit a persons losses to what the company owns and owes.

If a company is able to borrow money, and go bust, the there is a well established principle for creditors to try to recoup their losses. Generally, taxman, secured creditors, unsecured creditors.

However, as pointed out previously, this all goes up in flames if a director or directors engage in fraudulent activity. Then they can become criminally liable, as well as personally liable for their debts.

Obviously recovering any monies is a different ball game.

@Bambamhoohoo
whilst they wouldn’t know where the cash was I think they would most likely suspect because they would most likely ask to see bank statements etc. but also more because this has been going on so long

although from what op said - perhaps the accountants came in quite late and were the ones who asked him what was going on!!

the point on the tax owed not being 500k and being 150k suggests there were quite a lot of penalties racking up which they’ve reduced - most likely because the accountants have been helping

This was my thought too. What a terrible situation OP, I feel for you. You say you live him so divorce might not feel like the right thing for you but you do need to protect your finances, especially your home. Can you get independent legal advice?

I think it must depend if it just a bank account held in trust for child or a proper trust fund. I have just removed the money from my child’s bank account held in trust by me for them and closed it down. DC was happy with this and made aware of it as I will transfer money to them (they are an adult) but I didn’t need to get their permission.

There are lots of places now for training returners. I'd try a bootcamp with someone like ivee.

Absolutely this.
There are many lovely smaller houses you could downsize into, 2 people do not need an 8 bedroom house.
Between downsizing and selling the Porsche, could raise the 150k needed to pay the tax bill. The practical side of this can be very easily resolved. The moral side of it though - much more challenging.

As others have said - how you could think you could live like this on that salary is really strange. You may not see the all the bank accounts but you would know how much things cost. DH and I earn just under 100k between us. With tax allowances, it's probably quite similar (after tax) to the 130k that your husband earns - I know he wasn't paying tax OP but you said you thought he was.
We live in a 4 bed house, drive 2 skoda's bought second hand, have 1 holiday a year.
As a poster said you were living way beyond your means, I just can't understand how you didn't know that?

They really can’t and won’t. Your accountant has no responsibility or obligation to make you pay your tax. They would never ask to see your bank statement as as they have no right to and you would simply say no (and sack them) truthfully, because it’s not their responsibility or business they don’t particularly care anyway.

you can of course hire an accountant or tax lawyer specifically to help with your tax problems and negotiate on your behalf. This isn’t the same scope or role as the accountant who does your stat accounts/ tax returns etc

I have little experience with v small company accountants so will take your word!

but you definitely need a tax specialist (which it sounds like he got) when negotiating with HMRC

the last thing he needs is a criminal record for fraud or to be made bankrupt as that could jeopardise his job

They’ll Be no early retirement but on that salary and at his age you can pull this back

I know you have been married for years have kids ext but he will drag you down . He used your child’s money for Christ sake you need to open your eyes that’s not a red flag that’s a red country !!

Once again, HMRC can in some circumstances hold Directors of a LTD company personally liable for company debts

If you divorce the money from the house will go to pay off anything that's owed. You need legal advice from someone who knows about money. Don't do anything before finding out the facts. Not sure it being a Ltd company protects you from the tax man.

Being a company secretary is a legal responsibility. Yes, some people use their accountants as that. But in that case the accountants have/insist on access to all the records etc.

as you know, they actually very frequently do. It’s not common for a company to be liquidated without debts and the official receiver always comes after the directors- and indeed their family. There are many methods they use, whether or not they’d stand up in court- most people who have just had a company liquidated don’t have hundreds or thousands to spend in legal fees to find out. They are bullied and pressurised into payment plans to make themm go away. I’m glad OP got them down from £500k to £150k, they’re animals.

surely people don’t think you can set up a Ltd company (which takes 10 mins) make loads of cash, pay no tax or creditors then walk away unscathed? As if the government would allow that 😭

I'm with you son here. He basically stole from him and with his financial debt I'm not sure how he will be able to pay it back. I know you've been with this man for 30 years, but stealing 30k from my son would be a deal breaker for me.

The point is, this isn’t enforced by companies house. No one checks the co secs are doing fulfilling their duties. And tbh, unless there are implications with fraud or misadventure/ preference payments no one punishes them when they’re found out either

Yes, this update does change the lens a bit. Maybe he has been under a lot of stress and made silly decisions thinking he was helping to keep you happy so you didn't relapse. You still need to get to the bottom of this though and work out how to move forward with or without him.

Company secretaries can be charged with a variety of offences as a legal representative of the company. For example motoring offences committed by people driving a car registered to the company.

Whereabouts in the North do you live, OP? I would love to know where to get an 8-bedroom house for £400k.

You'd still expect her to be a bit pissed off and not rambling about Porches and being pretty.
The whole tone is off.

Anyway.

Sell the house, downsize.
Pay the debt.
Pay your son back.
Live to your means.
Take an interest in your finances from now on.

Job done.

It sounds like you want to stay with him. Now you need a plan. The obvious one is to sell the house and make sure everything is in your name and managed by you going forward. Selling the house will get your son some money back although I guess there isn’t a hurry for that.

Have you been spending everything in your accounts after bills paid? Did you not save? He was on a good salary so where are your savings? On that salary, at your ages, you should have had that money sitting in the bank and been able to just pay it off. Do you just spend everything you have?

This isn’t the time for Porsche jokes or snobbery about ‘modern houses’ and estates. It’s time to face reality: downsize if you have to, get a job (yes even in a supermarket) and work with your husband to repay HMRC. Anything less, and you’re not just complicit in tax evasion, you’re sneering at the very people who’ve been funding your lifestyle all along.

Well put. So many excellent posts on here. This is an easily fixable problem if the OP can face up to the fact that she and her husband have been living above their means, 8 bed house, of course the Porsche, while sneering at people who pay their taxes and live in the modern houses and drive the second hand cars. It's so distasteful. That her DH is scared to talk to her about this problem, has shouldered this on his own unable to share what's happened, the mention earlier upthread about suicide - yes, he's kept the OP in the dark but it doesn't really feel like the OP has been proactive in helping sort the problem.

OP, what sort of jobs have you been applying for? You say you've kept the house clean etc - lots of places looking for a cleaner.