HMRC & Retrospective Taxation - pushed to the brink

[washed up contractor]

Hi, this is my first post and I'm coming from a somewhat different perspective as I was married to a contractor during the years in which he was in the Montpelier scheme. I am not a contractor myself per se, so I hope this post will be allowed. We have three children together and have been in the process of divorcing for over 9 years.

Everytime we start the process of disentangling our lives, we come up against the barrier of HMRC and after years of possibly burying our heads in the sand and just getting on with our separate lives and, on my part, building my own career, we have just had a horrible year of threatening and misleading letters and demands for an inordinately enormous sum, £148K and growing.

I have recently enlisted the help of my MP, I won't say who he is but he is young and a bit of a rising star. He is keen to organise a meeting with HMRC to make the payments possible and to freeze and remove the interest. My husband has corresponded at length with HMRC who take months to come back to him; all the time the interest is growing. He has filled in a statement of liabilities - unfortunately, as we have both suffered adverse fortunes in these last 9 years, he has credit card debt, i have been on the breadline practically building a business as a counsellor.

Our family home has equity but I live in it and operate my business from there. I wouldn't be able to make a living as a counsellor if I had to pay average room hire rates per session as clients generally don't want to pay much more than £35 an hour where i live. I have been feeling so alone and shamed and guilty around this for these 15 years it has been going on for - the actions of the Inland Revenue have just left me drained and despairing - it is completely inhuman.

My husband was a niche specialist worker who needed to move from contract to contract selling his technical skills - there was no disguised employment - he weathered the storm of periods of unemployment between contracts with a young family etc.., he invested in his own skillset.

My point is two fold, firstly, are there other people out there affected by this, wives, families who would like to get together in some way to support one another ? and secondly, is there enough interest amongst the contractor community to highlight what has been happening in our industry either with a good investigative journalist, blogging, campaigning or publicising what is being done? I feel a huge sense of persecution constantly and last night i was low enough to consider all kinds of options just to be away from this impossible situation.

My husband's life is being destroyed, and although we are not together, mine is too. And my children are all really struggling with GCSEs, A levels and Uni and the stress of it, although i am not sure how much they actually know, is terrible. So if there are any of you on here who would like to connect, or can think of anything constructive we can do, i would really welcome the chance to do so. If this post is not allowed, I accept that too. It was quite hard to write quite honestly.

Yes, there are lots of people in the same position. Sorry but your MP will have no joy getting interest stopped irrespective of whether he is a rising star or not. There has been so much publicity and groups formed to raise awareness of this issue that Im majorly surprised you \ your husband seem unaware this fight has been going on for 15, 16 years.

As you both benefited from your husband being in the Montpelier scheme, Im afraid you will be on the hook for probably half the tax debt unless you can negotiate something with your husband as part of the divorce settlement. We have a number of husband \ wife couples divorcing where the wife thinks the debt is not her responsibility. Unfortunately it is.

Put bluntly, if you and husband cannot pay the demands, you best bet is likely to file for bankruptcy. Others may tell you once you divorce, you'll be free of the tax debt, Im sorry that isnt the case.

The only other realistic option is to arrange a Time to pay with HMRC when they will agree to you paying off the disputed tax bill plus interest (which will be high) over 2 or 3 years. Again, others may tell you a TTP over 5 years can be agreed, do not listen to them as HMRC will not agree to this.

Sorry to be gloomy but Im involved in this so know what the reality is. Be very wary of people who say for 18 quid a month and a one off joining fee of £200+ that they have a solution. They dont.

[BrilloPad]

Yes, there are lots of people in the same position. Sorry but your MP will have no joy getting interest stopped irrespective of whether he is a rising star or not. There has been so much publicity and groups formed to raise awareness of this issue that Im majorly surprised you \ your husband seem unaware this fight has been going on for 15, 16 years.

As you both benefited from your husband being in the Montpelier scheme, Im afraid you will be on the hook for probably half the tax debt unless you can negotiate something with your husband as part of the divorce settlement. We have a number of husband \ wife couples divorcing where the wife thinks the debt is not her responsibility. Unfortunately it is.

Put bluntly, if you and husband cannot pay the demands, you best bet is likely to file for bankruptcy. Others may tell you once you divorce, you'll be free of the tax debt, Im sorry that isnt the case.

The only other realistic option is to arrange a Time to pay with HMRC when they will agree to you paying off the disputed tax bill plus interest (which will be high) over 2 or 3 years. Again, others may tell you a TTP over 5 years can be agreed, do not listen to them as HMRC will not agree to this.

Sorry to be gloomy but Im involved in this so know what the reality is.

I agree with your post apart from the bits in bold. The court will have to take account of the debt in ancillary relief. However once that is complete, the spouse is not responsible.

In fact, my mother-out-law got in debt 3 years ago. And died 2 years ago. He husband was unaware. And all the debt was written off. In fact, she had a santander savings account with her funeral money in. And a santander credit card with big debts. The debt was written off, and the savings account was untouced.

I do agree it will have to be taken into account in ancillary relief.

[SummerhillLass]

Hello Washed up, I'm on the breadline pretty much so I have no way I can find £75K ! I haven't got near the personal tax threshold yet in my first 3 years of practice. My husband will recover from this financially; I won't. Selling the house to pay this liability means me moving out of the area where I live, stopping my business for a while as my clients won't be able to follow me and living apart from my children. I'm not even a contractor, but feels like i am the one being punished here.

I wasn't paid maintenance during our years of separation, and I did not decide to divorce because of this situation, although the added stress of the last 15 years was a contributory factor.

Also, as several of you have mentioned this, I have been searching the net for years to see what was going on around this but this is the first time I have connected with a community that was similarly affected. Hence, my first suggestion about whether there was any kind of support group for processing and dealing with this. I have felt very isolated and fearful for many years. Its been good to connect but also feels as though no-one on here has been left unscathed by this horrible situation.

Washed Up, your remarks about my MP lead me to think that you have heard of similar efforts by MPs to get the interest frozen? Our MP said he had succeeded in something similar but did not go into details. How many other people have tried the MP route ? And has there been anything in the media or any attempts to publicise what is happening to contractors ?

[webberg]

Hello Washed up, I'm on the breadline pretty much so I have no way I can find £75K ! I haven't got near the personal tax threshold yet in my first 3 years of practice. My husband will recover from this financially; I won't. Selling the house to pay this liability means me moving out of the area where I live, stopping my business for a while as my clients won't be able to follow me and living apart from my children. I'm not even a contractor, but feels like i am the one being punished here.

I wasn't paid maintenance during our years of separation, and I did not decide to divorce because of this situation, although the added stress of the last 15 years was a contributory factor.

Also, as several of you have mentioned this, I have been searching the net for years to see what was going on around this but this is the first time I have connected with a community that was similarly affected. Hence, my first suggestion about whether there was any kind of support group for processing and dealing with this. I have felt very isolated and fearful for many years. Its been good to connect but also feels as though no-one on here has been left unscathed by this horrible situation.

Washed Up, your remarks about my MP lead me to think that you have heard of similar efforts by MPs to get the interest frozen? Our MP said he had succeeded in something similar but did not go into details. How many other people have tried the MP route ? And has there been anything in the media or any attempts to publicise what is happening to contractors ?

PM me.

I'm working at home tomorrow and available all day if you want to speak.

Please PM and we can arrange a call.

[SummerhillLass]

Webburg, I have replied on your site as cannot PM on here.

[HMRC made Atlas Shrug]

[QUOTE=SummerhillLass;2500976]

Hello,

You are not alone. I am sorry to hear about your and your husband's situation. I like others suggest speaking to a professional, Webberg seems to know what he is talking about. Do speak to him.

What I suggest and this may be easier said than done, I hope you and your husband realise you are on the same side here. For both of your own sanity you have to stand together. You both need each other's support. I would not know what I would have done without my wife's support.

"My husband was a niche specialist worker who needed to move from contract to contract selling his technical skills - there was no disguised employment - he weathered the storm of periods of unemployment between contracts with a young family etc.., he invested in his own skillset."

This is all the sociopaths working at HMRC's fault. I was a contractor with my own ltd. company moving from contract to contract between different employers and agents with gaps in between where I earned nothing, but HMRC was making out I'm an employee. That is why I went done a loan scheme, on professional advice. HMRC suggested I should get professional advice ! But that is my problem.

You guys are not alone but please try to support each other. I've also been at this for many years now so I understand part of the stress you may be under.

"My point is two fold, firstly, are there other people out there affected by this, . . . ."

Thousands. HMRC gutted my wife and I's savings from hard work over many years. But always please try to remember, your family is more important than money and you are more important to (and loved by) your children than money.

".....what has been happening in our industry either with a good investigative journalist, blogging, campaigning or publicising what is being done? I feel a huge sense of persecution constantly and last night i was low enough to consider all kinds of options just to be away from this impossible situation. "

I am just a nobody but I've been trying to push for us all to get this into the public, to explain our side. BBC (rather HMTV or HMRCsBC), the main media is falsely portraying us all as tax evaders when we followed the law. In my opinion, we have to "go public" to stand a chance against HMMafia.

Whatever you do, do not put your head back into the sand.

Good luck and don't give up.

[regron]

Yes, there are lots of people in the same position. Sorry but your MP will have no joy getting interest stopped irrespective of whether he is a rising star or not. There has been so much publicity and groups formed to raise awareness of this issue that Im majorly surprised you \ your husband seem unaware this fight has been going on for 15, 16 years.

As you both benefited from your husband being in the Montpelier scheme, Im afraid you will be on the hook for probably half the tax debt unless you can negotiate something with your husband as part of the divorce settlement. We have a number of husband \ wife couples divorcing where the wife thinks the debt is not her responsibility. Unfortunately it is.

Put bluntly, if you and husband cannot pay the demands, you best bet is likely to file for bankruptcy. Others may tell you once you divorce, you'll be free of the tax debt, Im sorry that isnt the case.

The only other realistic option is to arrange a Time to pay with HMRC when they will agree to you paying off the disputed tax bill plus interest (which will be high) over 2 or 3 years. Again, others may tell you a TTP over 5 years can be agreed, do not listen to them as HMRC will not agree to this.

Sorry to be gloomy but Im involved in this so know what the reality is. Be very wary of people who say for 18 quid a month and a one off joining fee of £200+ that they have a solution. They dont.

To Be fair, I don't think anyone has said that and all the members of the Group you refer to (of which I am a member) don't think that either. It's about working towards getting a solution.

[jbryce]

Sorry to be gloomy but Im involved in this so know what the reality is. Be very wary of people who say for 18 quid a month and a one off joining fee of £200+ that they have a solution. They dont.

SummerhillLass - remember this is an open forum of (primarily) IT contractors so the veracity of some of the posts will be open to question. It's moderated for behaviour - not content.
Forum members also represent the cross-section of humanity - so worth reading peoples other posts to get a sense of them.

I think you're best speaking to WTT directly. We've not all given up hope just yet and you'll find a lot of people in BG in a similar position to you.

[mattfx]

I have no advice to offer; but I am sorry you've found yourself in this situation OP. I hope you manage to work it out.

[webberg]

Be very wary of people who say for 18 quid a month and a one off joining fee of £200+ that they have a solution. They dont.

I think you'll find that we have never said that we have a solution nor that the ideas we have are a guaranteed "win" against tax due.

I appreciate that you have a personal view.

In this instance however the fact is that we have a group that has ideas that are being used to try and mitigate the position.

We may have success and we may not.

Either way, the people with us understand the position with far more clarity than was perhaps the case when they joined arrangements.