Tax Debt

Being in debt is always difficult, and tax debt is one serious type of debt. HM Revenue & Customers (HMRC) expect tax to be paid promptly.

Dealing with tax debt

If you are sent a tax bill from HMRC that you cannot pay, it is essential to contact them and try to reach an agreement. HMRC have significant powers to recover money.

Options if you cannot pay your tax debt

The first step is communication with the Tax Office. This may open up some options. For instance, the tax office may give the debtor the ability to spread repayments.

Ignoring tax debt

Like any kind of debt, those in debt relating to tax should not ignore their commitment. HMRC can choose several options when dealing with money outstanding. This can include, for instance, distraint (whereby possessions are taken and auctioned), magistrates' court proceedings, or county court proceedings. Furthermore, HMRC can opt for bankruptcy proceedings, particularly in cases where your debt exceeds your assets.