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HMRC Archives - Bankruptcy UK



HMRC Homeowner Bankruptcy Avoidance

HMRC Homeowner Bankruptcy Avoidance

Avoiding bankruptcy when you have assets such as a home with equity or other assets that you don’t want to lose is essential.

Generally, its HMRC or Council Tax that makes the majority of individuals bankrupt in the UK and we’ve found that most people simply don’t understand the implications of being made bankrupt.

Therefore if you are or have been made bankrupt and you are a homeowner with equity in the property or have other assets that will enable you to clear all your debts in full then you may want to consider bankruptcy avoidance.

If you have received a statutory demand and have tried to get help, but for some reason have been unable to find the answers you are looking for, we suggest you call us as the problem is not going to go away. When you are made bankrupt and you are a homeowner, a £3000 debt will escalate into a much bigger debt.

Consider this example: 

Mr F is made bankrupt in march 2015. He is a homeowner with sufficient equity to clear all of his debts. He was made bankrupt by HMRC for £10,841.39 and the trustees fees are broken down as follows:

Statutory interest:-                                   £ 1639.00

Trustees costs:-                                         £19,128.30

Estimated Additional costs:-                  £ 5000.00 

Trustees Disbursements:-                       £   886.99

Estimated additional disbursements:-£    250.00

Legal Fees:-                                                £ 4781.85

Estimated additional legal fees             £ 1000.00

Agents fees:-                                              £  722.00

VAT                                                             £ 6353.87

Insolvency Service:-                               £ 1224.84

Petitioning Creditor costs:-                   £ 2297.00

Secretary of State Fees:-                        £11,957.53

Hence the total amount required to pay off all of the bankruptcy debts and achieve annulment is £66,083.55      

In this example, we can see how a debt of just £10,841.39 has escalated over the course of 22 months into a debt of £66,083.55  

If you are that homeowner facing bankruptcy but hesitating in drawing the money out of a property to pay the debt then now you can see why its worth doing whatever it takes to get a debt paid when you are a potential bankrupt homeowner seeking assistance.


I owe about £25000 and HMRC won’t give me two years to settle

I owe HMRC money and they will not enter in a payment plan – I also have other bills I cannot pay .. is bankruptcy the answer?

For reasons known only to HMRC, they will only allow 12 months to settle outstanding tax commitments, something which is costing them a fortune. Once someone has declared bankruptcy, all amounts owing are written off and there is no recourse.

Depending on your circumstances i.e. whether you have significant assets or not, bankruptcy may well be the answer. Most of the people we speak to are just everyday folks with a basic income and living in rented, and these are ideal candidates for bankruptcy.

In bankruptcy you may keep any car up the value of £1,000 and you won’t have to close your bank account unless you owe money to the bank concerned. In most cases there is no monthly payment after bankruptcy, but we can establish this for you in a few minutes. If you have a property with no equity it will not be lost in bankruptcy and we’ll explain more about that too.

Bankruptcy UK has been helping people with bankruptcy since 1998 and has the experience to get the best result every time. We will avoid jargon and confirm all discussions by email within 30 minutes. Feel free to call us for a chat about your circumstances on 01425 600129.

HMRC VAT Debts Bankruptcy

Can I include HMRC VAT debts in bankruptcy Yes you can. In fact, a large percentage of the cases we handle involve tax or VAT, sometimes both. One of the reasons for this is that HMRC is remarkably inflexible when it comes to payment plans, which need to be wrapped up within a 12 month period.

Imagine a time line where you include all assets and liabilities that you in your personal capacity have. Liabilities are taken away from assets if there are any. Even if you have a property with a mortgage with no equity it is still counted as an asset but an illiquid asset. HMRC and the revenue are creditors the same as any other creditor. They have no preference which means that they have to stand in line like everyone else. If you are concerned about being able to run your own business after a bankruptcy then you needn’t worry too much as theres no restrictions on Sole Traders in bankruptcy. So you can set yourself up as a sole trader as soon as you enter bankruptcy.

Depending on the case, this could mean a monthly commitment of £2000 – £3000 and most companies / self employed simply cannot sustain the payments. We think the Government is missing a trick here as surely it is better to recover the money over 24 – 36 months than get nothing at all. Still, it’s their call and they happily write off billions every year. No wonder our roads are in such a state.

Feel free to call us with any questions on HMRC and VAT Liabilities in Bankruptcy or for bankruptcy help on 01425 600129, we are here to help. Alternatively, post a question on our home page and we’ll help you that way. Please note, Court appearances are no longer required for bankruptcy and Bailiffs do not form part of the process.

Barrister Bankruptcy Help

Barrister Bankruptcy Help

Help for barristers who are experiencing difficulty with a bankruptcy petition and dealing with HMRC. In many instances cash flow is sporadic and as such it is common for the professionals to get into trouble with their financial affairs.

If you are simply having difficulty in negotiating terms with HMRC then you may want to have a discussion with us to see if we can succeed in negotiating terms and time to pay with HMRC.

You may have received a Statutory demand but have positive pipeline business that you can show and demonstrate then this really shouldn’t be much of an issue to obtain an adjournment. We have delivered some very impressive results for Barristers and have delivered scenarios that have left them jaw dropped.

No matter how smart and good at the law you think you are, you aren’t infallible when it comes to HMRC and balancing your finances. You will receive a statutory demand if HMRC are unpaid. Even though you may be great and getting fees in and may well be able to contribute monthly repayments, getting HMRC to agree to your proposal is another matter. This is where we shine and our expertise becomes believable when you don’t think theres anything that can be done.

Call us to find out how we can help and assist you.


Should I Go Bankrupt

bankruptcy-solicitorShould I Go Bankrupt

If you are thinking about bankruptcy but have a few doubts, why not call us for a pre-bankruptcy chat and we’ll run through everything with you.

Near the top of the list has to be the all-important income and expenditure, as this will decide whether it is right or not.

It is often the case that people overlook or under claim on certain aspects of their finances, something we will pick up on straight away. There might be other niggling doubts about cars, properties, HMRC or even Bailiff issues, but we have all the information you require to make an informed choice as to what you can do. Our advisers don’t use scripts and talk in Plain English.

Our Pre Bankruptcy consultation generally lasts between 15 and 30 minutes. We will be able to provide you with a full brief of what is discussed. We offer a very positive approach to bankruptcy.

You will have a clear understanding of how a bankruptcy will effect you and what to watch out for. We provide a full bankruptcy administration service in obtaining your bankruptcy order. You will find our staff helpful and cooperative at all times.

You will find that once you know what is involved we can then work to a time scale that will help you to focus on a date in the future where the order will be made. There are lots of things you can do to help yourself. Especially an Experian Credit Expert membership that will provide you with a full snap shot of your credit file.

What Debts are Written Off In Bankruptcy

We find that most people are confused with what can be included and what cant. What Debts are Written Off In Bankruptcy? And what are you going to lose if you enter bankruptcy?

Insolvency rules, regulations and what separates fact from fiction is hard for a lot of people facing difficulty to find.

Cars that are owned by someone else that the bankrupt has the use of are generally OK. Its actually quite common for people to help one another out and cars get bought by third parties for other people to use and maintain. On the registration document it states that the registered keeper may not be the registered owner.

Mortgage shortfalls, credit cards, unsecured loans, trade creditors can all be included in a bankruptcy.

Iva’s and debt management plans may have more flexibility when it comes to vehicles on finance needed for work can often be kept. Machinery and plant really needs to be necessary for the individuals occupation. But if you were a business like a small bus company or plant machinery company or business then you would not be able to have surplus stock that was not used as your basic tools of trade.

Work peoples tools are classed as tools of trade and will not be at risk.

Pets will not be classed as an asset unless for some reason there was a significant high value like a race horse. But nothing else should be at risk.

You can include everything in a bankruptcy from parking fines, HMRC liabilities and even solicitor and medical bills, but you can’t include child support obligations (CSA), Student loan debts, State benefit overpayments (in some cases, not all) and debts as a result of criminal activity / court fines. Regarding student loans, anything taken through the official channels cannot be included, but if a personal loan was taken to pay for studies, it can. Just to clarify, if you were to lose a civil case in court and were ordered to pay, say, £10,000 you would also be entitled to include this in the bankruptcy.

Bankruptcy UK offers a full bankruptcy administration service and will submit your bankruptcy application online. Court appearances are no longer required for bankruptcy. Call us for bankruptcy help on 01425 600129 or for an informal chat about your circumstances.

Tax Bill and on Benefits

I closed my business down last year without declaring any earnings to HMRC. I had some money saved to pay an accountant once I sorted the paperwork out, but things have changed and I’m now on benefits. I have spent my savings and cant keep up with my Credit Card bills. If I were to file for bankruptcy, what would happen to the tax that I owe? do I still need to file my tax returns with an accountant? I can’t afford this.

First of all, has HMRC approached you for a payment? Do you actually owe anything? If you are not certain, call them and advise them of your change of circumstances. There are many people in the same situation and they have people who can help. If it turns out that there is a substantial payment due, you might consider bankruptcy or a Debt Relief Order (if the amount is below £15,000). A DRO is similar to a bankruptcy and is designed for vulnerable people on low or zero income. If a bankruptcy is unavoidable, you would need to pay the £525 Official Receiver’s fee, though you would be exempt from paying the £180 Court Fee. The good news is that you will be able to include any other unsecured debt in the DRO / Bankruptcy.

HMRC Statutory Demand is worrying me

HMRC are proceeding with bankruptcy action against me as I owe them £40,000 and have rejected my offer of payment. I was served with a Statutory Demand two weeks ago. What will happen now? Will the court write to me or will they call at my address again? Do I have to attend the High Court hearing and how much notice will I get? Also, do I have to fill in the same bankruptcy forms as if I were applying myself?


If it gets as far as a hearing, you should be served notice no less than 14 days beforehand, but you are not obliged to attend court unless you have an objection. No one will come to the house and the documents are different from those if you were arranging your own bankruptcy, but it’s still do-able.

The good news is that you will be able to include any other unsecured debts in the bankruptcy. What we weren’t clear about is your residential status, whether you own a car and what your earnings are. One of the negative aspects of this action is that of an Income Payments Agreement, whereby any surplus income is attached for three years. Give us a call if you need help, as we have specialised knowledge of what can be claimed for expenses in bankruptcy.

Bankruptcy UK offers a full bankruptcy administration service and will submit your bankruptcy application online. Court appearances are no longer required for bankruptcy. Call us for bankruptcy help on 01425 600129 or for an informal chat about your circumstances.

Will I lose my laptop if I go bankrupt?

No, personal possessions – within reason – and household goods are exempt from bankruptcy, though any financial resources will be attached – including premium bonds, savings, etc. The exception to this are HMRC approved pensions, which are currently ring posted in bankruptcy.

There was a move made last year to attach pensions of those aged between 52 – 54 i.e. force them to take the cash portion of their pension and have it attached, but this was blocked by the Law Lords.

You are usually allowed to keep a car provided it is a) not worth more than £1,000 and b) clearly needed for work or some other important purpose like doing care work.

Bankruptcy UK offers a full bankruptcy administration service and will submit your bankruptcy application online. Court appearances are no longer required for bankruptcy. Call us for bankruptcy help on 01425 600129 or for an informal chat about your circumstances.

What debts are written off in bankruptcy?

In addition to the usual credit card, loan and overdraft debts, you may include HMRC, tax credit overpayments, creditor bills, utility bills, council tax, shortfalls on property repossessions and just about any kind of debt worth mentioning. Regarding property, it’s worth mentioning that even if a repossessed property has yet to be sold it can still be included in the bankruptcy as a ‘foreseeable debt’ and you would not be liable for any shortfall after bankruptcy.

You can’t include court (speeding) fines, Child Support payments and student loans, but you can include parking fines and congestion charges, which might be useful for those living in London!

Bankruptcy UK offers bankruptcy help across the board and will submit your application online. Court appearances for bankruptcy are no longer required. Feel free to call us on 01425 600129 for a chat about your circumstances.



Bankruptcy UK

Bankruptcy UK