Originally posted by d000hg
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Reply to: VAT And Tax concerns
Collapse
You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:
- You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
- You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
- If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.
Logging in...
Previously on "VAT And Tax concerns"
Collapse
-
-
You can also find charities who specialise in debt 'counselling'. As well as helping you with stuff like budgeting and simply talking it through, they have collective strength to strongarm creditors into freezing or reducing or writing off debts, and agreeing to achievable payment terms, which you couldn't achieve yourself.
Leave a comment:
-
1. For personal debt I suggest you go over to the moneysavingexpert site and join their forums. Then find the board that deals with people who are in debt. You will have to sit down and do a statement of affairs (debt) before people on there will help you and point you were to go. They will also tell you what things that you have to cut i.e. get rid of cars, down grade mobile phone packages, get rid of sky in short you need to become more thrifty.
One thing to note You cannot negotiate with your creditors if you don't have a proper statement of affairs.
2. For business debt you need to work out how to pay of your VAT before your corp tax. And then contact HMRC to pay the VAT then the corp tax. (You still have to talk to them first.) I knew another contractor who managed to get away with being 2 years behind in his corp tax but he was up to date in his VAT payments.
I would argue VAT as a business, and your council tax as a personal bill are the most important bills not to get behind with as everything else you can negotiate with.
HMRC will strike your business of for not paying VAT and can ban you from being a director, while if you don't pay your council tax you will be put in prison.
Yes the lender can repossess your house but are unlikely to if you negotiate with them and do it early. Other creditors will just threaten you. The worse they can do is put a charge on your house which will prevent you selling it but they will only do this as a last resort i.e. you don't talk to them.
On another note if you are on the bench now I suggest you sign on and do this in future. Even though the money is a pittance you need it and it's a way to show any creditors you don't have any money. Also if you are the only wage earner in your household at the moment you can get your council tax bill paid for while you are signed on.Last edited by SueEllen; 10 December 2012, 20:53.
Leave a comment:
-
Originally posted by psychocandy View Posttulip happens like but surely rule no 1 for the future.
Dont spend CT or VAT money. Leave it alone in company account. Just take out profits only and nothing else.
It sounds this is the case, but can you clarify for certain - did you never try to set the tax money aside, or did you save it but came to the point it was either spend the taxman's money or go hungry?
Leave a comment:
-
Originally posted by Dallascowboy View PostHi,
I am a Business Analyst Contractor and I work through my own Ltd Company. Over the last 3 years work has been very up and down and I have been 'in-between' contracts on average 4 months every year; as you can imagine this has caused me to run into debt problems and I am now about 4 months behind with my mortgage and also owe a substantial amount of Corporation tax and VAT to HMRC (25K approx).
Your numbers don't add up to me so suspect there is a lot more behind this. Pocketing the 25k in times of need will add up to 5 months extra (very rough numbers here) so over the three years will bring you as close as dammit to 10 months working per year and yet you still don't have the money for the mortgage? This has also been rolling for quite awhile. It is not like it has suddenly jumped out at you? Or has it?
I would assume there is awhole host of credit card debt behing this as well as just the house and HMRC which paints a different picture and advice would be different. If my assumption is anywhere close to right I would guess you are living way beyond your means and getting out yourself is going to be nigh on impossible when it appears you need to work 10-11 months just to cut even.
I would personally suggest you go straight to an accountant if you can stretch it (they could point out something about offsetting, loans or other aspects of your accounting you are not aware of) or/and straight to a debt managing service as I suspect these are not the only people you owe money to.
Leave a comment:
-
tulip happens like but surely rule no 1 for the future.
Dont spend CT or VAT money. Leave it alone in company account. Just take out profits only and nothing else.
Leave a comment:
-
I think there is a fundamental choice. Can you dig yourself out of this unaided?
If yes, you are better negotiating with the lender and HMRC individually. Arguably the lender is more important due to personal liability; HMRC can huff and puff but on Corporation Tax there isn't a lot they can do short of liquidating the company and even they are bright enough to know that for a typical small business that generally doesn't yield anything.
On the other hand if you can't dig yourself out of this then it would have to be advice from an insolvency practitioner, and maybe a Voluntary Arrangement - this would be complicated as it would have to be corporate and personal.
Leave a comment:
-
1. Accrue for all Tax payments, VAT, CT and Personal.
2. Get a reasonable war chest together. 6 months money minuimum.
Not great or helpful news now, but something to think about in future.
Leave a comment:
-
Also, figure out WHY you have got to this point.
I'm guessing you have seen the headline figures (day rate) and not budgeted for the fact you might have time off.
eg bigger house (rented or bought), more expensive car/holidays etc.
I suggest you estimate what a "normal" permie salary for your type of work would be, and start doing some proper budgeting based on that.
Leave a comment:
-
Originally posted by Dallascowboy View PostHi,
I am a Business Analyst Contractor and I work through my own Ltd Company. Over the last 3 years work has been very up and down and I have been 'in-between' contracts on average 4 months every year; as you can imagine this has caused me to run into debt problems and I am now about 4 months behind with my mortgage and also owe a substantial amount of Corporation tax and VAT to HMRC (25K approx). My concern is that I need to be able to operate as a Ltd company when I start my next contract (Jan 2013 hopefully?) but I also need a plan to pay HMRC and the Mortgage company? I don't want to go down the bankruptcy route but I also need to assure HMRC/Mortgage provider that I am going to pay my arrears with a suitable plan of action? Can you advise where I should start?
Then it's really just a case of working how much you'll be taking home, and trying to agree a sensible repayment plan with your creditors that'll avoid you losing your home and being taken to the cleaners by the taxman. It's always best to start these discussions as early as you can, so if you can demonstrate to them that you've a good contract and will be able to pay them off, they'll probably be quite sympathetic.
Leave a comment:
-
VAT And Tax concerns
Hi,
I am a Business Analyst Contractor and I work through my own Ltd Company. Over the last 3 years work has been very up and down and I have been 'in-between' contracts on average 4 months every year; as you can imagine this has caused me to run into debt problems and I am now about 4 months behind with my mortgage and also owe a substantial amount of Corporation tax and VAT to HMRC (25K approx). My concern is that I need to be able to operate as a Ltd company when I start my next contract (Jan 2013 hopefully?) but I also need a plan to pay HMRC and the Mortgage company? I don't want to go down the bankruptcy route but I also need to assure HMRC/Mortgage provider that I am going to pay my arrears with a suitable plan of action? Can you advise where I should start?Tags: None
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Leave a comment: