I'm in a huge tax and money mess

[CompleteTaxMess]

In short... I haven't paid any tax on my self-employed earnings for about 5 years. Within this time I have had a few PAYE jobs which of course I've paid tax on. I have been ignoring letters from the tax man - basically not opening them.

I am about £20k in debt and don't earn enough to cover my debt repayments and pay tax.

I've calculated that I've earned approximately £10-12k per year from self employed earnings. My husband supports us easily with his income.

I'm obviously starting to have sleepless nights about my money situation and really want to sort it out. I don't have the money to pay the tax I owe.

My husband and I have equity in our home.

I don't really know where to start to sort this mess out and am terrified we will lose our home.

Any advice would be really gratefully received.

Thank you.

Citizen's Advice Bureau?

I'd also recommend the CAB or one of the other free debt advice services such as CCCS and National Debtline. Before you go, you'll have to find the courage to open all the envelopes. Understand exactly what you owe in tax.... if you've only earned £10k-£12k over the last 5 years it's probably not very much. And get all your bank statements and credit card statements together so that you've got the full picture of your finances.

You say 'I am' £20k in debt.... does your husband know about the debts or have you been keeping things to yourself? Would he be willing to pay off your debts if he has a good income?

Yes my husband knows about the debts, I don't conceal anything from him. He earns a good salary but doesn't have the money to clear my debts.

I think you're right the best place to start is the CAB. I didn't know about the other places suggested - thank you. I want to address the situation but I'm worried that as soon as I go to the tax office they will demand money immediately. I don't know if thats stupid or a valid concern? Its what has stopped me in the past.

I've taken time off over the last couple of years to have a baby so haven't been working full time. I'm try to pick up more freelance work so that I can earn the money to clear my debts and tax but my huge worry is if I don't approach the tax office with the funds to clear the outstanding money they will make all kinds of scary demands.

Wish I could get my head out of the sand and face up to things.

The tax office is one of the few places that will issue bankruptcy proceedings automatically which could result in you losing your home so you need to contact them NOW. There will be fines for not filling in your tax returns but from what you have written you won't owe much, Once it gets to the court stage, those costs will probably double it so act NOW!

I echo redhelen you need to open all the letters from HMRC and then you need to talk them now. Legally repayment of HMRC is at the top of the tree before all other debt repayment.

Please phone TaxAid on 0345 120 3779 (Mon-Fri 10am to 12 noon) who deal with exactly this type of situation. The other organisations are likely to refer you to them. www.taxaid.org.uk

It is critical that you act now as 2007/8 goes out of time soon and you may be stuck with the HMRC estimate if you delay. It is also important to file your 2010/11 return as soon as possible or you will be charged the new late filing penalties which are much more severe. Please act now. TaxAid really will be able to help.

Thank you roquefort, i've just been reading the TaxAid website and will contact them today. Shaking with fear but I'll do it.

How did you get on with the call?

Yes how did it go? IMHO iscsry though it is the best thing to do is to try to sort this out as sooner that you do less chance of penalties and interest.