BN66 - Round 2 (Court of Appeal)

[smalldog]

IVA's

You can enter into an IVA with HMRC, from what I know this is very much a case by case basis and seems to apply in most cases to people with property/assets that would need to be sold in order for the debt to be paid...check out this site:

IVA.co.uk IVA Debt Help | Individual Voluntary Arrangement Forum

[Tax_shouldnt_be_taxing]

You can enter into an IVA with HMRC, from what I know this is very much a case by case basis and seems to apply in most cases to people with property/assets that would need to be sold in order for the debt to be paid...check out this site:

IVA.co.uk IVA Debt Help | Individual Voluntary Arrangement Forum

Just be aware that IVA's only work with certain asset to liability ratios and if all Creditors (or more than 50%) agree to it. If you owe loads then IVA's wont work in many cases. If all your assets were tied up in a Ltd then a CVA might be more likely. Note a mortgage lender has more say on IVA's and on 2nd or 3rd Charges than other would be Creditors so anything involving your house as an asset has to get by them first.

[Freelancer]

Thanks again Freelancer.

It seems very unfair that the Isle of Man Government should bear all of the brunt for this when it was wholly instigated by HMRC.

I hope HMRC do not get off scott free as usual.

story carried on the local Manx Radio at:-
http://www.manxradio.com/newsread.aspx?id=49674

[smalldog]

Just be aware that IVA's only work with certain asset to liability ratios and if all Creditors (or more than 50%) agree to it. If you owe loads then IVA's wont work in many cases. If all your assets were tied up in a Ltd then a CVA might be more likely. Note a mortgage lender has more say on IVA's and on 2nd or 3rd Charges than other would be Creditors so anything involving your house as an asset has to get by them first.

Hi TSBT,sure its not for everyone hence me saying on an individual basis, however it could help some depending upon their circumstances. My reasons for posting was just to highlight to others who may not even be aware of IVA's for them to do their own research

[Tax_shouldnt_be_taxing]

Hi TSBT,sure its not for everyone hence me saying on an individual basis, however it could help some depending upon their circumstances. My reasons for posting was just to highlight to others who may not even be aware of IVA's for them to do their own research

Quite right smalldog. I think you need to be able to settle 75% of a debt within 5 years for an IVA to be even viable.

Also found my notes from when I saw a Solicitor about this. Whilst I don't want to harp on about bankruptcy, it's good to know the process since it's not as bad as it first seems in that HMRC don't nab your house whilst you're asleep. So here's the bullets of the order of events I got from the guy.

HMRC send you a tax demand to pay within 28 days
You contact them to say you cannot pay and offer a payment plan (100 quid a month for 1000 years).
They reject it
You get a Solicitor
Brief proposes various payment options / Tomlin Order
HMRC reject it
HMRC pass the debt claim to their Enforcement Office
If you can propose paying the debt off within a year, the Enforcement Office will probably accept it.
You pay it off in 12 months or you can't
If you can't, the EO will issue a Statutory Demand served on you by hand
3 weeks after a Statutory Demand is served, HMRC can then proceed with a Bankruptcy Petition
The Petition is filed in the High Court and served on you personally
There then follows a Bankruptcy Hearing (at least 10 days after the Petition is served on you).
At the Hearing, you can ask for an adjournment of up to 2 months to better prepare yourself.
You can ask for various mitigating issues to be taken into account such as kids.
The Court then decides to grant the Petition or not as they deem fit. Their ruling is final.
If granted and you lose at the Hearing the Official Receiver (OR) will request a meeting with you. At the meeting, all of your financial coircumstances must be declared and signed by you. This is a legal statement. Lying could end up with you in jail.
The OR will then appoint a Trustee to manage your affairs. You are now no longer dealing with HMRC. High Net Worth folks or those will good assets may have an Insolvency Practitioner (IP) appointed as Trustee.
The Trustee will either seek an Order or ask you to agree payments over 3 years (max) to clear the debt in full.
If you cannot, then the IP will look at options to sell your assets.
At this point you get a good Solicitor to liaise with the IP and work out if there is a viable option to deal with the debt.
Once the OR has assigned a Trustee, HMRC don't deal with the debt further and interest stops when the Bankruptcy Petition is submitted.
You are bankrupt during the latter phases but the settlement of the debt is decided by the Trustee. Anything goes at this point in principle.

[smalldog]

Quite right smalldog. I think you need to be able to settle 75% of a debt within 5 years for an IVA to be even viable.

Also found my notes from when I saw a Solicitor about this. Whilst I don't want to harp on about bankruptcy, it's good to know the process since it's not as bad as it first seems in that HMRC don't nab your house whilst you're asleep. So here's the bullets of the order of events I got from the guy.

HMRC send you a tax demand to pay within 28 days
You contact them to say you cannot pay and offer a payment plan (100 quid a month for 1000 years).
They reject it
You get a Solicitor
Brief proposes various payment options / Tomlin Order
HMRC reject it
HMRC pass the debt claim to their Enforcement Office
If you can propose paying the debt off within a year, the Enforcement Office will probably accept it.
You pay it off in 12 months or you can't
If you can't, the EO will issue a Statutory Demand served on you by hand
3 weeks after a Statutory Demand is served, HMRC can then proceed with a Bankruptcy Petition
The Petition is filed in the High Court and served on you personally
There then follows a Bankruptcy Hearing (at least 10 days after the Petition is served on you).
At the Hearing, you can ask for an adjournment of up to 2 months to better prepare yourself.
You can ask for various mitigating issues to be taken into account such as kids.
The Court then decides to grant the Petition or not as they deem fit. Their ruling is final.
If granted and you lose at the Hearing the Official Receiver (OR) will request a meeting with you. At the meeting, all of your financial coircumstances must be declared and signed by you. This is a legal statement. Lying could end up with you in jail.
The OR will then appoint a Trustee to manage your affairs. You are now no longer dealing with HMRC. High Net Worth folks or those will good assets may have an Insolvency Practitioner (IP) appointed as Trustee.
The Trustee will either seek an Order or ask you to agree payments over 3 years (max) to clear the debt in full.
If you cannot, then the IP will look at options to sell your assets.
At this point you get a good Solicitor to liaise with the IP and work out if there is a viable option to deal with the debt.
Once the OR has assigned a Trustee, HMRC don't deal with the debt further and interest stops when the Bankruptcy Petition is submitted.
You are bankrupt during the latter phases but the settlement of the debt is decided by the Trustee. Anything goes at this point in principle.

TSBT one slight twist, I wonder if you can pay a lump sum of some amount you then have a better chance of IVA'ing the rest?

say for instance you owe £100k, you can pay £50k lump sum, and then IVA the remaining £50k, just a thought...dont know the mechanics..

[Tax_shouldnt_be_taxing]

TSBT one slight twist, I wonder if you can pay a lump sum of some amount you then have a better chance of IVA'ing the rest?

say for instance you owe £100k, you can pay £50k lump sum, and then IVA the remaining £50k, just a thought...dont know the mechanics..

Not sure. But when I asked about this, I was told that if there is a genuine case that you can pay off 75% of a debt within 5 years then an IVA is viable. But, the Creditor here (HMRC) needs to consent to it. If they don't then you cannot get an IVA. But in theory, if you owed £100K and could show that you could make a lump payment there and then of £50K and the rest over say 3 years then it *might* be the case that a Bankruptcy Petition is refused by the Courts but an Order is signed to hold you to the payments. Conjecture on this I'm afraid. But if HMRC don't accept such a payment plan and the EO files a Bankruptcy Petition then it's for you to argue the case in Court.

I want to make it clear that I'm not suggesting that there is some clever trick to avoid bankruptcy if that is the worst case scenario. I just want to point out what a Solicitor (actually 2) told me on how things go.

For those who are finding this possibility stressful, then I hope it helps to know that HMRC don't come knocking or nab the house there and then or the fact that you end up dealing with someone other than HMRC. And it does not happen overnight. Personally I just wanted to know who does what and when.

In hindsight, talking to a good Brief did make me feel better as I now better understand what does happen out there if it came to that. I'd suggest looking up a good IP nand asking for a 30mins chat and see what they tell you. If HMRC balls up and try to have a crack without following the rules then I'm happier to know what I'd be telling them to Foxtrot Oscar over than if I hadn't sought advice.

[DonkeyRhubarb]

Like TSBT, I don't wish to dwell on this depressing (and hopefully purely hypothetical) topic.

But if you think BR is a probable worst-case scenario, it might be worth having a read of this guy's experience with HMRC.

MoneySavingExpert.com Forums - View Single Post - HMRC and BANKRUPTCY

I'm not in this position myself but if I was then I'd definitely get professional help.

[DonkeyRhubarb]

Article on BBC IoM website

Island company sues for damages after police search

BBC News - Island company sues for damages after police search

ps. there's another article here:

http://www.isleofman.com/News/articl...?article=32516

[Tax_shouldnt_be_taxing]

Island company sues for damages after police search

BBC News - Island company sues for damages after police search

ps. there's another article here:

Court rules against 'heavy handed' raid |  Newsroom | isleofman.com

Thanks DR. "Technical Issues" hey? Sounds like TE63 where there were technical issues why the Scheme was lawful. Does anyone outside of HMRC Salford think that this whole matter is bollo*ks? As Toocan so rightly noted, "trust" and "partner" appear to be words where the HMRC defintion is somewhat different to everyone else. And given that I'm a "customer" according to HMRC, they need to pick up the pace on Customer Service. Hector, if you're reading this, don't you feel ashamed of yourself? And by the way, could you possibly tell US ALL why the 5 test cases YOU lined up for the Commissioners never got there? And please don't use use time and cost as a reason. What do you think we have now as a result of BN66? If you were in the Private Sector, you'd all be fired by now and claiming Dole (paid for by taxes). You're a sham, artificial and aggressive. All the factors that Parker would have used to dismiss you.