Huge tax bill

[lolacoxox]

In need of some advice please - my boyfriend has his own company and has had it for a few years. He works alone so no team. He has never payed tax and has always said he would sort it so believed him and stupidly asked no questions.

We own a house together and have a child on the way.

He has now got an accountant to sort his taxes out for him and it turns out he owns £40,000!!!

I am beside myself with worry. Cannot pay this and don't know our options. I'm so mad. Any advice welcome please.

Has this just been uncovered by the Accountant? Does the HMRC know yet? If they don't know yet, I wouldn't call them tomorrow, HE needs to think quickly of how he intends to pay, then bring it to their attention, I just mean hold off telling them by a day or two because they really don't give you long to pay it back.

I'd be reconsidering your relationship with him. Having a baby with someone so financially irresponsible will cause you a lifetime of problems. This is only the start.

You need to check if they mortgage, council tax, and bills have been paid and up to date.

You've also not said if this is in a LTD, or if he's a sole trader. This makes a difference to how this is handled.

I'd be disconnecting myself with this imbecile and leaving him.

No why do you ask I don't want to start talking about my business. Let me put it like this I am having heart attack at that figure.

What's the difference between sole trader and Ltd company is it a different tax?

If you don't understand that I don't think you are in a position to start offering tax advice.

Ltd company the company pays Corporation Tax and you as a director pay self assessment income tax on any dividends and any other taxable income.

Sole trader/partnership you pay self assessment income tax on profits of the company and any other taxable income

Sole trader/partnership you pay self assessment income tax on profits of the company and any other taxable income

^^ profits of the trading activity; there is no company

Yeah! Major major differences in tax rates, what is taxable, profit/loss, debt collection, personal liability…

You really shouldn’t be giving any advice as you don’t know the difference.

THIS.

Absolutely vital to know. And makes a huge difference in terms of his next steps and the outlook.

Yeah technically there is no incorporated entity, aka company, with a sole trader but in common parlance traders will refer to it as “their company” they’ll come up with a name for it “Tom’s Widgets”…so most people who don’t know the technicals tend to say “company” when there is no company.

If your ltd company is at your home address what is the percentage of your rent or mortgage can you use.

I know it isn’t any help for the current situation but going forwards it is imperative you have a second high interest account to transfer 30% of his earnings into for tax. Do not touch this account. Let it earn interest but you must always remember it isn’t your money. It is so important to do this as you go along when you are self employed.

I am sure you can set up a repayment plan. It isn’t in HMRC’s interest to force the business to close. I hope it all gets sorted.

Also would need to watch out that if it is a company and corporation tax hasn't been paid, has the appropriate personal tax been paid when the money is withdrawn? What about NI has that been paid?

I understand the whole liability aspect it's everything else.

Can you remortgage to add on some ££ even to pay some if if not all?

Jesus. Unless you are the OP using a different name, why do you keep asking such stupid (and irrelevant) questions when you clearly have zero clue?

Wtf are you giving tax advice for if you dont know such a simple thing?

Unless she jointly owns a house with him and he's a sole trader

Potentially declare bankruptcy, this would include liquidating the business and using assets and profit to pay off the debt.
Or downsize your house and use equity to pay it off, although he wouldn't be able to be on the mortgage, or you could rent.
Arrange a payment plan with HMRC but if his business isn't doing well then it might not be worth keeping afloat. Can he become employed somewhere?

On a side note, what did he think would happen?! That it would just go away. Other debt can sometimes go after years and years of ignoring, but HMRC is not one of those companies you can ignore. Be prepared they may take this to court if he continues to not pay

Sorry, but as a self employed person paying my tax bill this week I have no sympathy. If he owes £40k then he's earned good money.

Chill it's not that bad. My neighbour is an accountant and he's dull as fuck.

Yes I agree on paying taxes.

Well he runs a company very very badly.

Almost every single thing you’ve said has been incorrect and I really hope the op is giving you absolutely no attention whatsoever.

And that's pertinent how?

Chill it's okay she probably won't I won't cry about it. It's the ops thread I'll live to see another day.

Owing £40 k in tax is a lot of money.
Clearly a lot of money must have been coming in. I don't know you forget to pay tax as if it's a registered company, you get reminders to complete a corporation tax return. When you logon to Companies House, you also get reminders to complete your accounts, ensure your registration and officers are up to date - and there are fines if you forget to do that.

And if it's self assessment, then that's another issue re payment plans and personal assets.