oncewerewild

Hey Guys,

Lived in the UK for 15 years as a contractor, for a couple of years I uses a tax scheme (isle of man), stupid i know but seemed like the obvious choice at time. after around 8 years and many court cases (based on a retrospective law change), I now owe HMRC around $100K

Now they have sent a threatening letter that they will chase it here......

My situation is I lost EVERYTHING in 2010/11 so I dont have any assets, I run a business but my actual earning from the business (mostly playing at home dad) is about $400 a week so nothing.

1. Can the HMRC chase the debt here? If so how?

2. Being away from UK for 7 years now, I believe I have to be in the country to declare bankrupt over there.


any advice? yes I stuffed up, and yes i would pay if i could, but I dont have the income any more to do so, love to hear the friendly options

Oh i should mention the business itself is about $12k in debt....so bad luck is my middle name

quiltman

As I understand it, if the debt is large enough and NOT disputed, HMRC have arrangements with various countries to use their tax authorities to collect the debt on their behalf.
I know that writs can be issued in Oz regarding UK child maintenance payment arrears but again, as it's expensive the debt has to be large enough to be worthwhile. HMRC do have a department to chase debts overseas! Here's a bit of info Heading abroad to escape your debts? Think again - Telegraph Look up MARD on google!
It works both ways. HMRC will collect tax debts owed in other countries. Credit card and loan debts are not so easy to collect .

oncewerewild

Thanks, still not sure on how things are dealt with, the actual process, also when there is no money to be had like myself

spouse of scouse

I can only say what I'd do in similar circumstances.

Get legal advice from a suitably qualified person and, with their assistance, contact HMRC to work out a solution. And there IS always a solution.

Best of luck.

quiltman

Well said! I would not ignore it, get advice and tell HMRC you can't pay at the moment. I presume HMRC ask the Australian Court to collect using whatever methods are normal there. It may cause problems for you if ever you return to UK if either not settled or some agreement reached.I suppose it could affect your current business , even if it's not making a profit but that would be for your legal person to advise. Do they have debtors prisons in Oz?

oncewerewild

Thanks, yep thats the plan, just worried Im going to end up bankrupt in two countries

spouse of scouse

I don't know anything about tax recovery law in the UK or Australia, but common sense tells me that bankruptcy wouldn't be the worst thing in the world for you. You can recover from bankruptcy.

I'm just being curious now, and of course you don't have to answer, but how in the hell did you run up a £100,000 tax bill in a couple of years? Or is part of the sum penalties for using a tax avoidance/tax evasion scheme?

If HMRC sent a letter to your Australian address, they must know where you are. If they took you to court in absentia and it was ruled that you do indeed owe the money, has a warrant been issued for your arrest? The letter must have outlined future action HMRC can/will take if you don't make contact with them?

What you've written describes a very similar scenario to the current tax woes of Messi, Ronaldo etc. Assuming that you're not a professional footballer, and also assuming that this isn't a wind-up (don't be offended, it happens all the time), you need to get professional help asap.

Beoz

Under those old offshore UK tax schemes, and getting paid some of those contract rates that used to be (and in some cases still is) on offer in IT, Finance, Engineering, in the UK, ............ easy. Earning £20,000 per week before tax, no problem.

oncewerewild

Hey its was only a £66K tax bill over 3 years, that includes the massive amount of penalties they add. Sadly not a footballer, or with there income, just a at home dad now in self inflicted trouble. Yes bankruptcy seems like a positive option for me

oncewerewild

very true, sadly I wasnt one of those contractors, otherwise the tax bill would have been a lot more, and probably have the money to pay.

verystormy

I would get it sorted as quickly as possible as debts to HMRC do not necessarily remain a civil matter. Such debts are one of the few debts that can be processed through the criminal courts.

sr71

Yes, just had an ex-colleague done for £240k - absolutely zero negotiation or ability to argue. They are a law unto themselves. It was retrospectively applied too.

£66k is not a lot for HMRC, they have much bigger fish to fry. It'll be put on hold until you ever surface in the country again and use your NI number.

Also note that National Insurance debt can be statue barred, I think after 6-7 years. The tax will not be.

You won't need to go bankrupt in 2 countries (you can't go bankrupt in the UK anyway unless you've lived there for 6 months)

sr71

Nonsense, if they are just tax debts they are civil. Its when tax evasion is suspected and you've paid your dog a salary of £200k a year that the criminal stuff starts to appear.

JM70

Did you ever get any legal advice on this? I'm in a similar position and it looks like HMRC have stated to chase people in the UK so I don't think we are far behind. The fact there is still some outstanding litigation in the UK may mean that can't yet ask the ATO for assistance bit I'd really like to know what powers they have if any, it was my understanding the UK does NOT have a MARD agreement with Australia (NZ does).

I don't have any assets in UK, still have bank accounts but nothing of significance in them but I do own a property here within my partner so just want to understand they can do here

morpeth

I concur with the prior post get legal advice to negotiate with HMRC in some fashion, if they can indeed enforce collection efforts in OZ. It would be costly and time-consuming for them to do so, so more than likely some arrangement could be made, if they have the ability to collect in OZ.

Alternatively there is a lot of merit in bankruptcy for peace of mind if nothing else. I had a huge tax debt several years ago from an odd regulation regarding "phantom income"- long story, but as soon as I got legal advice the matter ended up being resolved, and I should have done so early to reduce worry.

The amount is large for you, but not for HMRC.

Good Luck !