Husband not been paying tax for years

[Shitsinthepost77]

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.

Its not quite as simple as that if SE though.
OP should have seen prvious Company Accounts - assuming these were filed

It's too late for you now op but a very hard lesson to others to never not be totally involved in family finances, especially if self employed.

You need some serious legal and financial advice before you make any major decisions or give him any more money!

You also need him to give you access to all his accounts, financial information, debt letters etc. if you are to have a hope of getting a handle on this.

Otherwise, you’re only ever going to get his sugar coated version of the truth and you’ll both still be flailing in debt for the foreseeable.

I’m surprised he hasn’t been bankrupted. Not paying tax is a really low thing to do

This all sounds a little bit suspicious as if it was business debt owed to HMRC and he liquidated the company the debt is usually written off as a result of the liquidation apart from certain debts and in my experience (I work in this industry) it's unusual to have to pay a large amount to HMRC personally. You need to find out exactly what this debt is in relation to and the amount due/who is due to. Ask him to see all correspondence from the insolvency practitioner and HMRC. If you search his company name on companies house you might be able to access reports from the insolvency practitioner which might give you further information. I don't want to scare you but you need to find out these details as if it does go further/he ended up being made bankrupt it could affect your home. I think you need to tell him it's time to be completely honest.

His company debts are not your debts so long as you are not directly linked to the company.

You need advice. At the moment you are totally in the dark.

Do you have a pension? Have you paid NI to be eligible for state pension?

Also thought this.

I'm so sorry for you as it sounds a complete headache to unravel. I guess you need to sit down with some kind of arbitrator (accountant, lawyer, financial advisor) and discuss all these things. The comments so far are really helpful - like how did he get hold of the trust fund money. I'd also want clear answers to:

1. How did £550k become £150k
2. What is the status of your savings (because we're your age and although it would be devastating, could pay the money out of these/ pension funds)
3. Where the money has gone

Certainly he'd have to pay off a decent chunk up front to show he's serious, so they could raise it by a remortgage perhaps?

Then if OP gets a job all her wages could be dedicated to the repayment schedule along with a chunk of his salary. If they can do this and propose a robust plan no reason why HMRC wouldn't accept it. I accepted TTP proposals for larger sums than this when I worked there.

This.

This marriage is dead in the water. There is no way of coming back from this, and leopards never change their spots.

You need to understand the entire situation and its impact on you. You should ask him to be open with you, but it may take a letter from solicitors to your husband. If the limited company owed tax and has been liquidated, then the tax debt would be paid as a dividend in the liquidation. A director wouldn't automatically owe anything in relation to this. Your husband may owe tax in his own capacity or he may have been made to contribute to the liquidated company's assets because the liquidator has brought an action against him. A liquidator or trustee in bankruptcy may be able to claw back transfers to you. Once you understand the situation, or if you cannot get answers, I would take legal advice.

Personal tax or LTD business tax? Unless the business is a going concern, it's probably time to be put into liquidation.

Personal tax, again, probably time to go bankrupt.

Both are crap and not the way you should do things, but when things get to this stage, unless you have the means to pay it back. HMRC will set up a payment plan, the type of which depends on the type of tax evasion, ie deliberate fraud, etc. Basically, you need to speak to HMRC and give them everything they need in terms of personal finances, etc. and negotiate a payment plan, plus any interest and or penalties you may have coming your way.

The only sensible option for you is to divorce him immediately. There's no point in sticking your head in the sand.

The life you were living was, and still is, a lie.

I saw this first hand with a couple I knew (and loved very much) who ignored their car-crash finances and lost everything. The wife refused to see what was right in front of her face and left all financial things to her husband. She chose to live in ignorance.

You must face up to the reality of your circumstances. Do not allow yourself to feel shame or embarrassment because that's not going to help. Get legal advice. Speak to your friends. You're going to need all the support you can get.

tax problem aside, HUGE red flags across this.

he is lying to you about major life changing financial decisions.

he has no problem to put your financial future at risk.

he thinks he is above the rules when he decides he not to pay tax.

he has a poor me victim attitude, but only when he is caught out.

he is trying turn his failings on you by saying he cant say no to you. what he is trying to establish here is that the situation is indirectly your fault.

he expects you to mind read. he wants you to know how much to spend without telling you what there is to spend.

he ‘breaks down’ instead if taking accountability.

he treats a problem he has created like it came out if the blue, which is akin to the thinking id a child.

he is happy to put you at the center of his problem whilst he avoids accountability by being somewhere unknown right now.

he is content with adding uncertainty to your already (thanks to him) full plate. by not coming home he is manipulating you into worrying about him instead of being rightfully angry at him.

your language reveals that you are used to clean up his messes:
he did…we had to pay a tax layer
he did…we had to take it from our savings
he did…our son lost his trust fund
he is applying the same rule to your son, he messes up and it is your sons duty to literally pay for it.

all of this translate to:

•no empathy for others
•avoids accountability on a large scale
•pathological level of lying
•victim mentality by shifting blame to you
•ignores known consequences (he knows he has to pay tax)
•is content for the consequences of his doing to ruin your and your sons life

my ex had the same traits and turns out he is a covert narcissist. you should read up on the victim mentality of a covert narcissist.

your son is correct: divorce, salvage what you can, run for the hills.

I would divorce & sell the house, you need to protect yourself before the taxman takes your home and your left with nothing.

Sorry to tell you but your husband is a narcissistic conman. Where is all this money gone? Gambling, another woman. He must of been earning good money to owe that much tax, plus he stole off your son. Don't let him manipulate you. Also don't be surprised if he doesn't owe money elsewhere. See a lawyer, but unless your home and assets are protected somehow unfortunately you may be in for a big downgrade of lifestyle. Harden your heart and think of yourself and your son now. I'm sorry this has happened to you. Good luck.

It sounds like he hasn't understood how to run the finances of his business properly at all.

You have to put aside taxes as you go, ideally 25% of profits into a separate account. The business should have had a separate account to what you had access to as a family.

Tbh from what you put it sounds like you've been used to a lifestyle you couldn't afford - expensive watches, trust funds etc.

Divorce.Divorce.Divorce.

Taking the trust fund is theft.
He’s a thief.

I wouldn’t worry about it. I’m owed £25,000 via a business. Who owes HMRC £915,000.
Absolutely nothing has happened to him. He is living his life. And has set up a new business and started again

You need to tackle this head on and claw back some sort of control , do not wait for him to sort anything out, he clearly can't be trusted.

What else is he hiding if he can make huge lies like that and just carry on?

Is he really staying away because he's embarrassed or could it be more?

I mean it with love but would you ever feel 100 percent secure and settled with this man who has lied to the point of being caught out massively twice and then run away rather than actually properly face up to it and sort it? And then he's thrown other things that aren't really his at it or used stupidly expensive tiny fixes rather than actually dealt with it properly?

She should probably search his name, her name and even their son's name to make sure they are not involved in any companies they know nothing about. Consents can be forged. Or could this not happen in UK?

@Shitsinthepost77 get him to call Hmrc when you are with him, and control the conversation so he asks the queustions you need answers to

does he have an accountant? Contact them and have him add you as someone to talk to about the account - they should know the full amount actually owed.

You’ll need to lead on this to get the full picture and then decide what course of action is open to you and if you want to support him to get this resolved.

good luck x

In reality your husband probably doesn't earn £130k

Actually a good third of that should have been paid over as tax.

You will probably also owe interest and penalties for non payment and if he's done anything stupid/dodgy to avoid paying tax those penalties can be massive.

Id run a mile. Assume you stand to lose the house. I'd plan on getting a job and fast.

He also needs a better tax lawyer because if it’s a limited company, That’s the point. It’s limited liability.