Some great advice already given, and I'd also like to say I admire what you're doing for your friend.
To put this in perspective, if we're talking about £24k in total, the actual (potential) unpaid tax and NICs bill, even worst case scenario, is considerably smaller than her personal debt. I'm not saying it's an insignificant sum because to people outside of the general contracting world (!) it most certainly isn't - I'm just saying that whilst it's the complex and slightly scary problem, it isn't actually the biggest one. So whilst all of this is very important, getting on top of the personal debt is probably the main priority (that I imagine you're helping with anyway, just not talking about it as much on here because it's not as relevant - the principles of debt management are a lot simpler to implement than IR35/ LimitedCo stuff!)
The only thing I wanted to add was to emphasise that to me, the most important thing is for you to help her do is to 'ringfence' the problem by ASAP getting her to a position where she is operating properly and being paid net. You've mentioned an umbrella company so I assume that is what you're helping her towards. Either way, I'd focus more effort on this in the short term and less on unwinding the historic position.
Has she been diagnosed formally with depression e.g. given anti-depressants by GP even? The reason I ask is because in the event of any HMRC proceedings commencing, that kind of thing can help significantly, not necessarily in outcome, but in slowing down the process/ allowing reasonable time/ calling off the dogs a bit. And that is going to be important. So if the depression isn't something that is logged properly with her GP and formally on record, I think it's important to encourage her to see her GP to discuss. Obviously this is true for her own mental health anyway as this will be the way to get help and support, but also because having it on record is going to be important. I would encourage her to divulge to her GP at a high level the financial problems she is in and the spending she has done, as that feels like an important symptom to me.
It's a shame that like-for-like, if she carried on doing the same/ similar work for the same/ similar rates she's going to end up with a drop in income just at the point where she needs every penny she can get for getting back on track...
Good luck with it, for your sake and hers.
To put this in perspective, if we're talking about £24k in total, the actual (potential) unpaid tax and NICs bill, even worst case scenario, is considerably smaller than her personal debt. I'm not saying it's an insignificant sum because to people outside of the general contracting world (!) it most certainly isn't - I'm just saying that whilst it's the complex and slightly scary problem, it isn't actually the biggest one. So whilst all of this is very important, getting on top of the personal debt is probably the main priority (that I imagine you're helping with anyway, just not talking about it as much on here because it's not as relevant - the principles of debt management are a lot simpler to implement than IR35/ LimitedCo stuff!)
The only thing I wanted to add was to emphasise that to me, the most important thing is for you to help her do is to 'ringfence' the problem by ASAP getting her to a position where she is operating properly and being paid net. You've mentioned an umbrella company so I assume that is what you're helping her towards. Either way, I'd focus more effort on this in the short term and less on unwinding the historic position.
Has she been diagnosed formally with depression e.g. given anti-depressants by GP even? The reason I ask is because in the event of any HMRC proceedings commencing, that kind of thing can help significantly, not necessarily in outcome, but in slowing down the process/ allowing reasonable time/ calling off the dogs a bit. And that is going to be important. So if the depression isn't something that is logged properly with her GP and formally on record, I think it's important to encourage her to see her GP to discuss. Obviously this is true for her own mental health anyway as this will be the way to get help and support, but also because having it on record is going to be important. I would encourage her to divulge to her GP at a high level the financial problems she is in and the spending she has done, as that feels like an important symptom to me.
It's a shame that like-for-like, if she carried on doing the same/ similar work for the same/ similar rates she's going to end up with a drop in income just at the point where she needs every penny she can get for getting back on track...
Good luck with it, for your sake and hers.
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