any advice what can I do about HMRC penalty?

HMRC VERY HIGH PENALTIES

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I was working in the club in years 2011-2014, never declared self employed, my English was bad and I was told I didn't have to. Then, 8 years ago HMRC tax man turned up to my doors with £ 55000 bill for penalties fpr self-assesment. I got in touch with them and offered repayments of £50 a week ( I was only earning £250 a week back then), but they didn't accept and said they will most likely procede with bankruptcy. But I never heard from them again, until 8 years later in March 2024, when I had taxman appear on my doorstep again with the same bill of £55000. Can anyone advise if I can do anything, I can't afford to pay it, I didn't know you could appeal the penalties, is there anything I can do to at least mitigate them? I earn £ 22000 a year

Replies (12)

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By Samantha20
28th May 2024 08:43

You need to contact a debt advice charity such as StepChange:

https://www.stepchange.org

Do not go to any other commercial organisations which say that they will help you as they will probably make things worse.

There are also other organisations you can contact on here:

https://www.gov.uk/debt-advice

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Replying to Samantha20:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
28th May 2024 09:19

I Agree. If you can't afford to pay the debt (and assuming the sums cannot be challenged) you should get advice on personal insolvency procedures.

Stepchange is a charity that will offer this advice for free.

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By JCresswellTax
28th May 2024 10:16

What were you doing 'in the club'?

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By I'msorryIhaven'taclue
28th May 2024 11:32

Further to what JC has asked you, was it your only job?

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By alepan
28th May 2024 12:05

Yes, that was my only job, I was a dancer. Please don't judge me, I was in very difficult situation, with no money and abusive relationship at the time, so it felt like the only way to support myself at that time. And I was paying the club to work there, plus they were taking half the money I have earnt after each shift

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Replying to alepan:
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By Paul Crowley
28th May 2024 16:13

You owe some money as clearly you were not an employee, based on what you have now shared.
Your income was taxable and you failed to declare it or pay tax on it.

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By FactChecker
28th May 2024 13:10

It's a shame that this was posted twice (and that mods haven't merged the two sets of responses) ... so, for completeness, the other thread (and even more responses) can be found here:
https://www.accountingweb.co.uk/any-answers/any-advice-what-can-i-do-abo...

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By Justin Bryant
29th May 2024 09:50

Maybe you should submit an application for a late FTT appeal. A sympathetic judge and citing this case (re deductible expenses) could help:

https://www.rossmartin.co.uk/sme-tax-news/3624-dancer-careless-for-not-u...

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Replying to Justin Bryant:
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By Paul Crowley
29th May 2024 13:01

Good link.

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Replying to Paul Crowley:
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By FactChecker
29th May 2024 13:27

Interesting, yes ... but pertinent?
*That* dancer had an accountant and had been filing returns ... the issue being over the claimed expenses for which (as per OP) there was scant documentary evidence.

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Replying to FactChecker:
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By Paul Crowley
29th May 2024 16:06

She got away will making stuff up.
OP has not given anything away about tax, claiming all liabilities are penalties.
She also claimed that 'she did not know' and that someone advised her that her earnings were below the limit. I am not certain that the turnover was below the VAT limit.
The link gives OP the sort of expenses that are reasonable.

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Replying to Paul Crowley:
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By FactChecker
29th May 2024 18:58

I take your point - if OP realises it was merely illustrative of the possibilities on that side of the equation.

But the continuing claim that the full £55k is all penalties is suggestive that OP is lost in the land of Tax - and has never declared or paid any Tax ("never declared self employed, my English was bad and I was told I didn't have to").

Hence, as everyone has suggested, OP's choices are between throwing herself on the mercy of a charity advisor or appointing someone to fight her corner.
[Talk of bankruptcy is not wrong but potentially unhelpful, IF it is not arrived at through one of those channels - as OP may not have understood the implications.]

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