www.iva.co.uk

I came home from work this evening and was told by my parents that they received a letter in the post for my brother (all four of us live under the same roof, i.e. parents, brother and myself). Anyway going by what my dad said the letter is from a debt collection agency saying that bailifs will be around in two weeks. The letter is for my brother and turns out that it is in relation to unpaid tax bill of circa £3000 and now the total debt is at something like £7000! My brother kept this a big dark secret from us until he had to spill the beans to my parents today. I am utterly shocked at him. He is only in his early twenties and has racked up this serious amount of debt to be paid to the tax man.

Anyway I'm worried for him and want to know if anyone can advise? My dad has asked him to go and see an accountant to see what can be done - he will se an accountant tomorrow. However, I can't see that an accountant is going to help him here.

He doesn't have any assets so there's no chance on bailifs getting anything from him if they call round.

I would basically like to see if there are any options for him? My mum thinks he can actually go to jail for not paying the tax man - is this true?

Sorry for the long email but your help and advices would be very much appreciated.

Thanks

I dont belive the Inland Revenue will put people in Jail anymore for unpaid tax bills, however they dont take lightly to people ingnoring demands and will look to make somebody bankrupt, so i dont suggest it is ignored.

Am i right to assume your brother is self employed, is his business being run well and making a good turnover ?

Does he have any other unsecured debts ?

Thanks Carl for getting back so quickly.

My brother has always worked for self-employed individuals and therefore does not run any business himself. However, he was always expected to file his own tax returns even though he doesn't own or run the business. Does this make sense. I haven't seen my brother yet this evening to clarify the details with him (honestly he b***** well tells us nothing).

He has no other unsecured debts that I know of and no assets whatsoever except basic amenities (clothes etc).

Our fmaily has had a really bad run of fortune over the years. Both my parents are in Debt Management Plans, I'm in an IVA and now it looks like my brother is going to have to go bankrupt. Would I be right to assume that my brother's debt won't affect my parents or me (i.e. we couldn't be made bankrupt because of him)? Sorry for blabbering on.

Yes it makes perfect sense.

Think you need to sit down with him and see if you can clarify things as there may be other things he isnt telling you (but i am sure you dont need me to tell you that)

His bankruptcy wont affect you or your parents in anyway so no need to worry about that.

I would suspect though that if this is his only debt, and the IR have not yet served bankrupcy papers he may be able to set up some kind of payment plan with them.

Thanks again Carl for getting back so quickly.

We will talk to him later and see what this accountant also advises him tomorrow morning. Bankruptcy papers have not, as far as I am aware, been filed at this stage so probably a good idea to consider repayment plan with HMRC. Although, looks like bankruptcy realistically may be his only option as he earns next to nothing anyway.

If I get anymore news on this I will fill you in.

Also, I take it if baillifs do come round they would be in no way entitled to lift anything that actually belongs to my parents or myself saying as the debt is my brother's? Not that we have anything of major value anyway, but I would not be a happy bunny to say the least if anyone was to come into our living room or my bedroom to lift items that actually don't even belong to my brother.

Baliffs are not my strong subject, i am sure somebody else will be along shortly or tomorrow to help.

From my understanding they need to have a CCJ in place first, and then payments to be missed on the CCJ before they can send a court appointed baliff, as any other baliff has no rights at all to remove goods.

If a court appointed baliff does happen to turn up they will need a warrant of execution which entitles them to come and make a list of things they intend to take, and you can then appeal against this if the items do not belong to your brother.

If the baliff is not court appointed then dont let them in the house, they have no rights.

But like i said sure someone will offer more advise shortly

Thanks Carl for your advices. Hopefully this can be resolved prior to getting involved with bailiffs.

To add to Carls post:

First the bad news: HMRC also have an ancient power called distraint. They don't need a Court Order. The bailiff turns up (he can't force entry) and leaves a notice itemising goods he has inspected. If the debt is not paid within 5 days he can turn up to remove them.

Now the good news: They are unlikely to use this option on a domestic property, and they can only seize goods that actually belong to the debtor so your property and that of your parents will be safe (although your brother doesn't need to know any of that at this stage[;)])

Ultimately I think your brother may well go bankrupt, if only for the reason that the longer they leave it before taking precipitate action, the greater the HMRC debt will become. I note that he will be going to see an accountant - as you indicate your brother seems to be self employed in name only I imagine there's no business to save and he has no assets and therefore probably no compelling reason to do an IVA. Does he have any professional qualifications?

I would like to reassure you that his debt is his debt. The only downside would appear to be that unlike your parents DMPs and your IVA the bankruptcy will be advertised.

Hope this helps.

Thanks Ian

The correspondence he recived the other day from the HMRC has threatened this "distraint" as you mentioned. Thanks also for reassuring me that the bailifs can't lift anything that doesn't actually belong to him.

In answer to your question he has no professional qualifications. He saw the accountant today and bottom line is accountant could not do anything for him (as I expected anyway). He now has an appointment to visit his local tax office which is due for tomorrow and he will discuss it with them (I can't see what they are going to do either other than say "pay up"). He has a query over the actual original amount of tax due anyway and will also take this up with the tax office tomorrow.

Looks like worst case scenario will be bankruptcy. I take it if he is made bankrupt and it is adverstised that only his name will be made public and not those who also live under the same roof as him? I know I'm coming across a little selfish here but I don't want my parents or my own name going through the gutter thanks to him.

Thanks again

If worst comes to the worst and he is made bankrupt

If he is made BR his name, address and occupation will be published in the local paper and the London Gazette. However, the advert is very small. Mine was tucked away at the back of the local paper with the 'adult services'.

Thanks Skippy. Believe it or not but a lot of sad cases from my neck of the woods would probably look at the 'adult services' sections lol. So it would just be his name that would be published and not mine or my parents. That's even if he does go bankrupt; I think he will be lucky to avoid prison here (hope we are just exagarating about that last bit though).

Thanks again Skippy

Hi Beresford,

Just been reading the postings since our first conversation (or postings)

Yours or your parents names will not be published the papers as Ian said the debt is HIS debt and wont involve anyone else.