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Are you a Director concerned about HMRC tax debts?

Received HMRC Chasing Letters? If you are a Director of a company, Oliver Elliot can help you address letters you have received from HMRC seeking to collect in monies due.

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HMRC Tax Debts

Overview Of HMRC Chasing Letters

HMRC chasing letters are letters that come in those notable government ‘brown envelopes’, that seek to remind people about tax compliance and to collect in monies that are due to the taxman.

What Are HMRC Chasing Letters?

There are a few reasons why entrepreneurs neglect to settle their tax affairs quickly. They may find filling in government forms troublesome or the business might be going through a diffcult time and really cannot afford to pay.

Why Does HMRC Issue Chasing Letters?

At the point when organisations fail to meet their tax commitments, they will get chasing letters from the taxman, all of which will have one goal: to ensure tax returns are completed, recover tax that is due to HMRC and encourage tax compliance going forwards.

HMRC has a duty to collect in tax that is due and does not have the option of permitting the taxpayer to avoid the liabilities.

What Is A Tax Return?

A tax return is a form that is completed by the taxpayer to inform HMRC of the amount of tax that is due for payment and report the key factual information to enable HMRC to check the taxpayer’s calculations.

Time To Pay Arrangements

Although HMRC is perceived to be an aggressive creditor when it is taking action to collect money owed by the taxpayer, HMRC does recognise that it can work with taxpayers to make the process easier. It will often do so when a taxpayer cooperates and engages with HRMC.

It is often unhelpful to your working relationship with HMRC if you want to have HRMC agree to a Time To Pay Arrangement on the one hand and then on the other hand, if you fail to promptly liaise and communicate with HMRC. It is important to keep the lines of communication between yourself and HMRC open and fluid. An HMRC inspector will likely want to help you and work with you if they can see that you are fully engaged with the process and want to resolve the matter. Think about it from their perspective and you can find a suitable way forward.

However, Time to Pay Arrangements are harder to obtain if you have a poor history of tax compliance and as a result, do not inspire confidence that it is in the interest of HMRC if you are accepted for a Time To Pay Arrangement.

HMRC County Court Chasing Summons

If you fail to comply with the terms of a Time to Pay Arrangement then eventually or sooner you can anticipate that HMRC will pursue the matter to seek to chase after the money it considers it is owed. A County Court Summons can arise when any creditor seeks to recover money that they consider is owed. At the point when this occurs, the business should react quickly within 14 days by paying everything, paying just what it considers it owes, or safeguarding the case. Organizations can demand an additional 14 days to react if the case is being protected or if it is paying just what it trusts it owes.

For the situation where the case can’t be refuted, the duty obligation will be affirmed and demonstrated in court. If the organisation doesn’t react to a County Court Summons within 14 days, it could wind up with a County Court Judgment.

What To Do When Chased By HMRC With A Court Summons

When chased by HMRC with a Court Summons you have 14 days to either pay the sum due or dispute the matter or pay part of the debt and dispute the rest.

If you do nothing then you will typically find yourself with a County Court Judgment (“CCJ”). This could affect your credit rating and may make it harder or more expensive for you to obtain credit from lenders going forward because the CCJ will typically stay on your credit file for up to six years.

How To Resolve HMRC Chasing Letters and Court Summons

Once you have received chasing correspondence and a County Court Judgment from HMRC is it important that it is dealt with immediately. You should at the very latest within 30 days apply to set aside the County Court Judgment if you consider it has been raised in error.

It is possible to negotiate installment payments in relation to an HMRC County Court Judgment but you may well need to provide evidence that you are unable to pay the debt immediately. However, if you simply do nothing then you risk HMRC deciding that the failure to pay the HRMC tax debt is evidence of the company’s insolvency and then HMRC can wind up the company.

HMRC Chasing Letters Can Escalate Into Distraint Proceedings

At the point when overdue HMRC debts remain neglected for an extended period, a notification cautioning of implementation of enforcement by distraint can be served on the business. This notification is deployed to enable HMRC to obtain its unpaid taxes due via the seizure and sale of assets of the company, such as its stock. After receipt of the notification, the business has five working days before HMRC levies an official visit to the company to claim business assets. There are clear guidelines on what can and can’t be taken in this way to repay some or all of the HMRC tax debt. However, potentially the good news is that it would be unlikely that the taxman will take away business assets that would prevent the business from trading. Remember HMRC does want the business to succeed because successful businesses in a thriving economy mean more tax revenues.

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Disclaimer: HMRC Chasing Letters

This page: HMRC Chasing Letters is not legal advice and should not be relied upon as such. This article HMRC Chasing Letters is provided for information purposes only. You can Contact Us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.