Can I include HM Inland Revenue and Customs (TAX) debt in an IVA?
HM Revenues and Customs consider all IVA proposals on an individual basis
We receive a lot of calls and emails from the public asking; "Can I include HM Inland Revenue and Customs (TAX) debt in an IVA?".
Yes, HM Inland Revenue and Customs personal income tax self assessment tax can be included in an IVA.It is important that the IVA proposal include all debts to the taxman whether they are known or contingent (not worked out yet.)
HM Revenues and Customs consider all IVA proposals on an individual basis and will support those where the following rules are met:
- There are no exceptional reasons for rejection, such as fraud of previous disregard to statutory obligations
- Debtors are honest in their financial disclosure
- The debtors offer is their best available but also viable and achievable
- The proposal shows provison for all future debts to be paid on time.
- All creditors are treated equally
Arrears of Income Tax/VAT/PAYE.
Tax debt is just another unsecured creditor, so if you are looking at an IVA please include the amount owing to HM Revenue and Customs within the list of creditors you intend to present the IVA Insolvency Practitioner.
Money Advice Direct has many years experience in dealing with IVA proposals. This experience has allowed us to have many discussions with the HM Inland Revenue. The HM Inland Revenue and Customs are actually a very supportive creditor.
IVA – Advice on what to do if the HM Inland Revenue is owed money
The HM Inland Revenue like people to be compliant – follow the rules so long so long as all outstanding returns have been submitted they will be more supportive.
However if the HM Inland Revenue feel that a person has deliberately held money back from them they can sometimes take a moralistic stance.
The HM Inland Revenue will request debtors to be able to provide a detailed summary of the events that have caused the non-payment, and demonstrate that you will follow the tax rules in the future. If they HM Inland Revenue are happy they will support the payment of IVA contributions.
IVA – Do I continue paying tax as normal once the IVA has begun
HM Inland Revenue have a special way of dealing with tax in an IVA because for the remainder of the fiscal year in which you are in an IVA (ie up until 5 April of the current of next year) you are not required to pay any tax or national insurance to HMRC. This does not mean, however, that you can keep the money - it just means that you have to hand it over to the IVA supervisor as part of the IVA.
If you have would like know if you can include all HM Inland Revenue and Customs Income Tax, PAYE, VAT, in an IVA please complete the following form or telephone 0800 074 6918.
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