Advice please on tax owed.

[skiton]

Had a letter from bluestone credit management chasing tax owed from 09/10 tax year. I'm selfemployed and haven't always got enough money left over to make payments as work is very slow. I have been making small payments when I can but balance is still £4k. What powers do bluestone have and should I contact them or still keep making payments direct to hmrc when I can. Thanks

[Gbarbm]

Had you received any correspondence from HMRC about the debt prior to the involvement of Bluestone?

[skiton]

Yes I have had letters from HMRC and 3 visits and explained my situation and they were happy for me to pay £100 a month but due to the amount of work I do and don't get sometimes I can't afford £100 and some months I have missed. I'm not trying to get out of not paying it, it's the length of time that these people (bluestone) will demand it is paid in.

I can go sometimes 3 maybe 4 weeks without work in winter as the amount I get can be upredictable. Tax year 10/11 I broke even so had no extra to pay tax.

[Gbarbm]

Normally when a time to pay arrangement is made with HMRC they will pass on low level debts to external debt collectors if it is defaulted upon.

The only thing I can suggest is to either contact HMRC and renegotiate a repayment plan, although in all honesty, i suspect they will say it's been passed to the debt collectors, deal with them.

In which case, you would need to write to bluestone and request a time to pay arrangement with them.

It may be worth checking your liability for that year, did you claim all relevant business expenses for example

[skiton]

Confusion. I did not read the letter correctly, apparently the sum outstanding is for a little over £600 this maybe my NI. And yes I claimed for all expenses etc.

[Gbarbm]

Right, well if it's Class 2 NI that's a slightly different scenario.

As NI is not a tax or duty (it's an insurance - does what it says on the tin! ) It is classed as a civil debt so if any arrangements are defaulted upon HMRC will either deal with it in house via debt management and banking unit (DMB) or if it's low level (below £5K I think) they will pass it on to a debt collection agency