Archive for the causes of debt Category

Record for Personal Insolvency Broken in England and Wales

According to the government’s Insolvency Service, over 33,000 personal insolvencies occured during the second quarter of 2009, breaking all previous records for England and Wales. The increase demonstrates a 9% rise over the first quarter of 2009 and is 27% higher than the same period in 2008. Many of these individuals are finding some relief in either IVAs (link) or, in more extreme situations, they are seeking a Bankruptcy (link).
Although the number of companies experiencing insolvency has decreased by 14% compared to the first quarter of 2009, it remains 23% higher than the same period in 2008.
Since the end of 2007, personal insolvencies have been soaring due to the recession and its financial implications on the budgets of average people. During the final quarter of 2007, well over 23,000 people went bust but today the number of people experiencing the same situation has increased by almost 40%. Bankruptcies (link!) accounted for over 18,800 of the overall 33,000 plus personal insolvencies which is lower than in the past, but Individual Voluntary Arrangements (link!) rose to take up 12,225 of that overall number of insolvencies.
For the second consecutive quarter, the number of companies going through administration, voluntary arragements or receiverships decreased, but experts warn that this trend may not continue into the future.

According to the government’s Insolvency Service, over 33,000 personal insolvencies occured during the second quarter of 2009, breaking all previous records for England and Wales. The increase demonstrates a 9% rise over the first quarter of 2009 and is 27% higher than the same period in 2008. Many of these individuals are finding some relief in either IVAs or, in more extreme situations, they are seeking a Bankruptcy.

Although the number of companies experiencing insolvency has decreased by 14% compared to the first quarter of 2009, it remains 23% higher than the same period in 2008.

Since the end of 2007, personal insolvencies have been soaring due to the recession and its financial implications on the budgets of average people. During the final quarter of 2007, well over 23,000 people went bust but today the number of people experiencing the same situation has increased by almost 40%. Bankruptcies accounted for over 18,800 of the overall 33,000 plus personal insolvencies which is lower than in the past, but Individual Voluntary Arrangements rose to take up 12,225 of that overall number of insolvencies.

For the second consecutive quarter, the number of companies going through administration, voluntary arragements or receiverships decreased, but experts warn that this trend may not continue into the future.

Credit Card Cheques Expected to Face Serious Opposition from UK Government

A new post is being created to help consumers recoup losses from unwanted credit card cheques which have become such a huge problem in the UK in recent years. The cheques are from rogue traders and are expected to be banned in the near future, as well, due to the amount of debt they add to the already staggering debt problem in the UK that has seen so many turning to Individual Voluntary Arrangements (link!) and Bankruptcy (link!).
According to the latest figures coming out of the Bank of England, UK citizens owe loans, credit card debt and overdrafts that total to £233bn.
However, the reaction to the current plans to create a Consumer Advocate are mixed, though the White Paper on its creation outlines the Advocate as a means to raise awareness about the severity of current consumer struggles. It would also act on behalf of groups of the public who are seeking refunds or compensation when the case is judged to be of “national importance”, such as against a substantial and unfair debt from a rogue company.
The government is looking for action to be taking in regard to debt levels during this current recession. They want lenders to be held more accountable for irresponsible practices within their industry because UK credit card debt is again standing at £54.4bn after having been reduced for a short time, months ago.
Credit card cheques have proven to be quite controversial because of the handling fees incurred for using them. These blank cheques are often sent to credit card holders along with their monthly statements as a means of enabling the customer with a different way to spend the funds from their card’s account. If things go awry, these cheques do not offer the same protections as the cards themselves and they almost always do not have an interest free period that the card does, leading to confusion for consumers and thus, increased spending.
Since the government has been expected to ban these cheques for some time now, they will be banning them in order to halt companies from sending unsolicited cheques. This means credit card companies may only offer these to those who have opted in to receive them ahead of time rather than eliminating the option to consumers altogether.
This news follows the announcement from Uswitch, a price comparison website, that states 20% of UK consumers have seen their credit limits rise without asking for such an increase.
Consumer groups have been requesting that there be more help for consumers who believe they have been unfairly treated by companies and as a result, experienced significant financial loss.
The person who will be the Consumer Avocate in the coming year will be an individual comfortable with being involved in representing substantial groups of consumers who seek compensation through the courts and also highly public consumer campaigns. These consumers who feel they have been ripped off will be able to perform group actions against the company named by opting in to the group legal action.

A new post is being created to help consumers recoup losses from unwanted credit card cheques which have become such a huge problem in the UK in recent years. The cheques are from rogue traders and are expected to be banned in the near future, as well, due to the amount of debt they add to the already staggering debt problem in the UK that has seen so many turning to Individual Voluntary Arrangements and Bankruptcy.

According to the latest figures coming out of the Bank of England, UK citizens owe loans, credit card debt and overdrafts that total to £233bn.

However, the reaction to the current plans to create a Consumer Advocate are mixed, though the White Paper on its creation outlines the Advocate as a means to raise awareness about the severity of current consumer struggles. It would also act on behalf of groups of the public who are seeking refunds or compensation when the case is judged to be of “national importance”, such as against a substantial and unfair debt from a rogue company.

The government is looking for action to be taking in regard to debt levels during this current recession. They want lenders to be held more accountable for irresponsible practices within their industry because UK credit card debt is again standing at £54.4bn after having been reduced for a short time, months ago.

Credit card cheques have proven to be quite controversial because of the handling fees incurred for using them. These blank cheques are often sent to credit card holders along with their monthly statements as a means of enabling the customer with a different way to spend the funds from their card’s account. If things go awry, these cheques do not offer the same protections as the cards themselves and they almost always do not have an interest free period that the card does, leading to confusion for consumers and thus, increased spending.

Since the government has been expected to ban these cheques for some time now, they will be banning them in order to halt companies from sending unsolicited cheques. This means credit card companies may only offer these to those who have opted in to receive them ahead of time rather than eliminating the option to consumers altogether.

This news follows the announcement from Uswitch, a price comparison website, that states 20% of UK consumers have seen their credit limits rise without asking for such an increase.

Consumer groups have been requesting that there be more help for consumers who believe they have been unfairly treated by companies and as a result, experienced significant financial loss.

The person who will be the Consumer Avocate in the coming year will be an individual comfortable with being involved in representing substantial groups of consumers who seek compensation through the courts and also highly public consumer campaigns. These consumers who feel they have been ripped off will be able to perform group actions against the company named by opting in to the group legal action.

Retail Sales Surge in June

According to official figures, after a pronounced drop of sales in UK shops during May, sales shot up 1.2% in June. This most likely comes because of an increase in summer clothing purchases as the public attempt to deal with the hot weather of this season.
According to the Office for National Statistics (ONS), sales rose 2.9% during June of 2008. In an effort to encourage consumers to spend, shops have pushed their summer sales forward and this has combined nicely with the heatwave to trigger additional purchases.
Although economists had expected a 0.3% rise in retail this June after a drop of 0.9% this May, it appears that sales in retail are in fact quite healthy.
Clothing retailer Next said that the fortunate weather had boosted its sales to an extent that they felt comfortable raising their profit forecast.
Of course, all of this comes thanks to the easy access that consumers have to store cards and other forms of personal credit, so there could be a rise in individual debt following not far behind.
Some analysts believe that this impressive improvement in retail sales figures supports the notion that the worst of this current recession is now over.
It is expected that the Economic growth figures due Friday will show that the overall UK economy shrank by 0.4% from April to June of 2009. Compared to the 2.4% contraction for the same period of time in 2008, this is certainly an improvement. Yet, analysts insist that retail sales are mercurial and that UK households will most likely continue to struggle economically.
According to the ONS, textile, clothing and footwear sales in retail stores rose 11.3% compared to 2008, yet there was a decline in big-ticket household items sales, as well.

According to official figures, after a pronounced drop of sales in UK shops during May, sales shot up 1.2% in June. This most likely comes because of an increase in summer clothing purchases as the public attempt to deal with the hot weather of this season.

According to the Office for National Statistics (ONS), sales rose 2.9% during June of 2008. In an effort to encourage consumers to spend, shops have pushed their summer sales forward and this has combined nicely with the heatwave to trigger additional purchases.

Although economists had expected a 0.3% rise in retail this June after a drop of 0.9% this May, it appears that sales in retail are in fact quite healthy.

Clothing retailer Next said that the fortunate weather had boosted its sales to an extent that they felt comfortable raising their profit forecast.

Of course, all of this comes thanks to the easy access that consumers have to store cards and other forms of personal credit, so there could be a rise in individual debt following not far behind.

Some analysts believe that this impressive improvement in retail sales figures supports the notion that the worst of this current recession is now over.

It is expected that the Economic growth figures due Friday will show that the overall UK economy shrank by 0.4% from April to June of 2009. Compared to the 2.4% contraction for the same period of time in 2008, this is certainly an improvement. Yet, analysts insist that retail sales are mercurial and that UK households will most likely continue to struggle economically.

According to the ONS, textile, clothing and footwear sales in retail stores rose 11.3% compared to 2008, yet there was a decline in big-ticket household items sales, as well.

Debt in the UK stands at Double the Average of Europe

The debt capital of Europe is now, unfortunately, Britain. UK citizens are borrowing an average of nearly twice what those in other western European countries borrow.
Credit cards and other unsecured UK debts stood at £216bn in 2005 alone. That is over a third of the total borrowing in Europe for all forms of debt except mortgages. This means that, according to the Datamonitor research firm, the average resident of the UK owes £3,175 and the total personal debt of the UK stands at £1.2 trillion, including mortgages.
According to this report on the market in 16 European nations for borrowing through hire purchases, credit cards, personal loans and overdrafts, the UK has quite the gluttonous appetite when it comes to credit. Compared to the UK average of £3,175 the average European owed unsecured debts of only £1,558.
These numbers are due mostly to the skyrocketing levels of borrowing that have been reached over the last ten years in the UK. Most of this new debt has been created with the aid of credit cards. Compared to most European countries, the British are far more comfortable taking on credit card debt.
Outstanding credit card balances have risesn by over 380% since 1994 according to figures from the Bank of England. While credit card debt may not be difficult for many people to repay, for those facing large debts it can be incredibly difficult to deal with. This is why so many people are turning to Individual Voluntary Arrangements (IVA), debt management plans and even bankruptcy in more severe cases.
The French trailed closely behind the UK in terms of new lending last year while the Germans came in second in terms of the amount of debt currently outstanding. Even though the lending market is overshadowed by the largest economies, smaller economies like those in Greece and Turkey saw the fastest rising levels of borrowing that didn’t include mortgages. Although it went through a 2001 economic crisis, Turkey saw new lending shoot up by 52% between that year and 2005. Greece, during this same time period, saw its debt from unsecured borrowing increase by 29%. Both countries have the fastest levels of outstanding consumer debts out of all 16 countries.
In the case of Turkey, there is barely a mortgage market and that means most borrowing is in the form of credit cards or other unsecured debts. In Holland, the situation is very different and there only 5% of all debt is unsecured because people typically expand their mortgages in order to buy things.

The debt capital of Europe is now, unfortunately, Britain. UK citizens are borrowing an average of nearly twice what those in other western European countries borrow.

Credit cards and other unsecured UK debts stood at £216bn in 2005 alone. That is over a third of the total borrowing in Europe for all forms of debt except mortgages. This means that, according to the Datamonitor research firm, the average resident of the UK owes £3,175 and the total personal debt of the UK stands at £1.2 trillion, including mortgages.

According to this report on the market in 16 European nations for borrowing through hire purchases, credit cards, personal loans and overdrafts, the UK has quite the gluttonous appetite when it comes to credit. Compared to the UK average of £3,175 the average European owed unsecured debts of only £1,558.

These numbers are due mostly to the skyrocketing levels of borrowing that have been reached over the last ten years in the UK. Most of this new debt has been created with the aid of credit cards. Compared to most European countries, the British are far more comfortable taking on credit card debt.

Outstanding credit card balances have risesn by over 380% since 1994 according to figures from the Bank of England. While credit card debt may not be difficult for many people to repay, for those facing large debts it can be incredibly difficult to deal with. This is why so many people are turning to Individual Voluntary Arrangements (IVA), debt management plans and even bankruptcy in more severe cases.

The French trailed closely behind the UK in terms of new lending last year while the Germans came in second in terms of the amount of debt currently outstanding. Even though the lending market is overshadowed by the largest economies, smaller economies like those in Greece and Turkey saw the fastest rising levels of borrowing that didn’t include mortgages. Although it went through a 2001 economic crisis, Turkey saw new lending shoot up by 52% between that year and 2005. Greece, during this same time period, saw its debt from unsecured borrowing increase by 29%. Both countries have the fastest levels of outstanding consumer debts out of all 16 countries.

In the case of Turkey, there is barely a mortgage market and that means most borrowing is in the form of credit cards or other unsecured debts. In Holland, the situation is very different and there only 5% of all debt is unsecured because people typically expand their mortgages in order to buy things.

UK Public Warned Loan Sharks May Make a Come Back

As lenders become more cautious about their lending, increasingly larger numbers of UK citizens grow more susceptible to using loan sharks as the recession continues. A report from government think tank New Local Government Network estimated that this caution from standard lenders would lead an additional 35,000 people to turn to illegal money lending operations. They selected Manchester, Gatehead, Lincoln and Stoke as places most likely to be attractive targets for loan sharks.
The group suggested that councils should invest more funds into credit unions. They also stated their research indicates that a minimum of 165,000 UK citizens have already used loan sharks and paid incredibly high rates of interest as a result.
Those struggling with debt would be wise to consider the advantages of an IVA or Debt Management Plan which can help reduce the overall debt and end the viscious spiral of interest-fueled debt growth.

As lenders become more cautious about their lending, increasingly larger numbers of UK citizens grow more susceptible to using loan sharks as the recession continues. A report from government think tank New Local Government Network estimated that this caution from standard lenders would lead an additional 35,000 people to turn to illegal money lending operations. They selected Manchester, Gatehead, Lincoln and Stoke as places most likely to be attractive targets for loan sharks.

The group suggested that councils should invest more funds into credit unions. They also stated their research indicates that a minimum of 165,000 UK citizens have already used loan sharks and paid incredibly high rates of interest as a result.

Those struggling with debt would be wise to consider the advantages of an IVA or Debt Management Plan which can help reduce the overall debt and end the viscious spiral of interest-fueled debt growth.

Debt for Police Officers

Research as shown us that theses may be some valuable suggestions for managing officers who are experiencing financial difficulties so we created this article to share these suggestions for Forces within the UK who are managing officers who have fallen into such financial troubles. This is in no way meant to be interpreted as a prescriptive document or official financial advice.
While each case should definitely be dealt with based on the unique criteria of that situation, some basic suggestions could provide some uniformity and additional clarity to those who deal with these issues.
According to research, more officers than in prior years are now going through financial difficulties for a wide variety of reasons. Relative pay levels for officers fluctuate at a near constant rate and at the same time, financial institutions are eager to enter into credit agreements with officers. This can even be the case in situations where they would not have done the same for a member of the public who was in a different line of work and in the same circumstances.
How to Determine When an Officer is in Financial Difficulty
Circumstances for each officer will be very different depending upon factors such as: the earning ability of their domestic partner if they have one, children involved in their relationships and how well they are able to manage their own debts. Considering these facts, then we will define ‘financial difficulty’ as:
A situation in which an officer has little or no chance in the near future of being able to meet their current debt.
It is important that Forces are aware that officers who have fallen into financial difficulty are usually in one of three primary situations:
Those officers going through marital troubles
Those officers who have experienced a change in their family’s or their own financial situations
Those recruits who now have unmanageable debts
In many instances a Debt Management Plan or an IVA (Individual Voluntary Arrangement) may be a solution you could advise such officers to look into. It’s always best to intervene early if you can and help them solve their situation before it ever becomes dire.

Research as shown us that theses may be some valuable suggestions for managing officers who are experiencing financial difficulties so we created this article to share these suggestions for Forces within the UK who are managing officers who have fallen into such financial troubles. This is in no way meant to be interpreted as a prescriptive document or official financial advice.

While each case should definitely be dealt with based on the unique criteria of that situation, some basic suggestions could provide some uniformity and additional clarity to those who deal with these issues.

According to research, more officers than in prior years are now going through financial difficulties for a wide variety of reasons. Relative pay levels for officers fluctuate at a near constant rate and at the same time, financial institutions are eager to enter into credit agreements with officers. This can even be the case in situations where they would not have done the same for a member of the public who was in a different line of work and in the same circumstances.

How to Determine When an Officer is in Financial Difficulty

Circumstances for each officer will be very different depending upon factors such as: the earning ability of their domestic partner if they have one, children involved in their relationships and how well they are able to manage their own debts. Considering these facts, then we will define ‘financial difficulty’ as:

A situation in which an officer has little or no chance in the near future of being able to meet their current debt.

It is important that Forces are aware that officers who have fallen into financial difficulty are usually in one of three primary situations:

Those officers going through marital troubles

Those officers who have experienced a change in their family’s or their own financial situations

Those recruits who now have unmanageable debts

In many instances a Debt Management Plan or an IVA (Individual Voluntary Arrangement) may be a solution you could advise such officers to look into. It’s always best to intervene early if you can and help them solve their situation before it ever becomes dire.

Dealing with Debt

These days, credit in very easy to obtain for those living in the UK. Those looking to led money include small scale money lenders, mail order firms, credit unions, finance companies, insurance companies, credit card companies, building societies and banks. Most of us will eventually require credit in some form or another, whether it is a mortgage to buy a house or a loan to purchase expensive electronics, furniture or a new car. The definition of credit is buying a product or service under conditions that offer you time to pay it off. That credit itself is paid for in the form of interest. Those who borrow money would be wise to check the APR (Annual Percentage Rate) to make sure they are getting the cheapest credit possible.
It’s easier than you might think to end up borrowing more money than you have the ability to repay and when you do that, the resulting money owed is called debt. To word it another way, credit is debt that you have under control while debt is credit that has gotten out of control. Many people end up borrowing even more money against their debts in the hope of clearing what they owe, instead creating an even larger debt for themselves.
When people experience debt problems it is usually due to multiple debts they owe becoming overdue, such as:
Overdue on Holidays (Particularly ‘Fly now, pay later’)
Overdue on furniture payments
Overdue on TV/Video/Stereo equipment
Overdue on car payments
Overdue on electricity, gas or telephone utilities with the result of being cut off
Overdue on council tax with the result of bailiffs or worse consequences
Overdue on mortgage with the frightening result of repossession and subsequent homelessness
Debts have a nasty tendency to ruin lives when they get out of hand so it is crucial that you seriously consider borrowing money each and every time you do so. You and your family’s lives are what will be affected should the situation spiral out of your control. More often than is commonly believed, debt is a cause of the breakdown of a marriage. Your golden rule could be: Never borrow more money than you are absolutely certain you can pay back.
If you do, despite your best intentions, find yourself struggling with debt, take a moment to consider your options for getting your financial life back on track.
A Debt Management Plan or Individual Voluntary Arrangement (IVA) may be exactly what you need to get yourself back into financial health once again.

These days, credit in very easy to obtain for those living in the UK. Those looking to led money include small scale money lenders, mail order firms, credit unions, finance companies, insurance companies, credit card companies, building societies and banks. Most of us will eventually require credit in some form or another, whether it is a mortgage to buy a house or a loan to purchase expensive electronics, furniture or a new car. The definition of credit is buying a product or service under conditions that offer you time to pay it off. That credit itself is paid for in the form of interest. Those who borrow money would be wise to check the APR (Annual Percentage Rate) to make sure they are getting the cheapest credit possible.

It’s easier than you might think to end up borrowing more money than you have the ability to repay and when you do that, the resulting money owed is called debt. To word it another way, credit is debt that you have under control while debt is credit that has gotten out of control. Many people end up borrowing even more money against their debts in the hope of clearing what they owe, instead creating an even larger debt for themselves.

When people experience debt problems it is usually due to multiple debts they owe becoming overdue, such as:

Overdue on Holidays (Particularly ‘Fly now, pay later’)

Overdue on furniture payments

Overdue on TV/Video/Stereo equipment

Overdue on car payments

Overdue on electricity, gas or telephone utilities with the result of being cut off

Overdue on council tax with the result of bailiffs or worse consequences

Overdue on mortgage with the frightening result of repossession and subsequent homelessness

Debts have a nasty tendency to ruin lives when they get out of hand so it is crucial that you seriously consider borrowing money each and every time you do so. You and your family’s lives are what will be affected should the situation spiral out of your control. More often than is commonly believed, debt is a cause of the breakdown of a marriage. Your golden rule could be: Never borrow more money than you are absolutely certain you can pay back.

If you do, despite your best intentions, find yourself struggling with debt, take a moment to consider your options for getting your financial life back on track.

A Debt Management Plan or Individual Voluntary Arrangement (IVA) may be exactly what you need to get yourself back into financial health once again.

Tax Debt in the UK

When You Can’t Pay Your Tax
In this article we want to explore the primary aspects of an inability to pay one’s tax.
Some terms to better help you understand this article are as follows:
Collector – The person who purses those who have not paid tax. Today these individuals are part of the RMS (Receivables Management Service). However, before a collector will pursue you, an initial application for payment is sent from one of the two Accounts Offices in either Cumbernauld or Shipley. If, instead local enforcement action must be taken for payment not having been made, the Recovery Office will deal with this matter. Usually, the Recovery Office is named after the city or town where it is located and this office has jurisdiction for the area in which you live or trade. In cases where a bankruptcy is involved, the EIS (Enforcement and Insolvency Service) in Worthing will get involved. Those employed by the RMS may contact you if your returns are outstanding, but they do not process your return themselves.
The issuing and processing of returns is handled by RMS offices which in this article will be called “tax offices” because that is what they are traditionally called in an unofficial sense. It’s important to realize that different people within the RMS have different roles so the “collector” who contacts you is usually a different person from the RMS who does not deal with your specific tax return – that would be the “tax office”.
Warning Signs of Impending Problems
Each year, thousands of individuals get into arrears with their tax. Normally, the individual is made aware of this situation when they see a debt on their Statement of Account. After a short time, a collector will generally get in touch via letter or telephone and ask for an immediate payment. It is important to remain calm and fight any sense of panic you feel.
The RMS can frighten people by threatening them with legal action, but it is still crucial that you don’t panic if this happens because the situation may not be as dire as it seems. Remain calm as you work through the situation and consider your options, as well as how you got into the situation.
The first thing to remember is that you should never ignore a statement of account or a demand from a collector because that is the worst action to take. If there is any chance that you can resolve your situation then you will want to act quickly because if you do nothing then you are inadvertently raising the risk that you will face legal action.
Remember, the amount being demanded could be incorrect. You may find that you disagree with what either the collector or the Statement of Account state is the amount of tax owed. In some instances your statment may include what is called a determination, which is an estimate and made because the tax return (or tax returns) have not been completed. If this is the case it can be corrected.
Unfortunately, the collector who is paid to pursue you for upaid tax may or may not be trained in how to understand the tax so you could well be wasting effort if you try to persuade them that the figure is incorrect. Generally you will need to contact your tax office to make the needed adjustments because they are the ones who deal with your tax return.
You will end up liable for penalties, surcharges, interest and tax charged on determination if you have not completed your tax return (or tax returns) which is not only correct, but enforceable until you have submitted a completed return. Once you have submitted the return the amount of tax will be revised so that they reflect the amounts shown on your return. Then you will only need to pay the revised debt plus interest and any outstanding penalties or surcharges that are still due in respect of the revised debt.
In cases of ‘non-return’, outstanding debts are pursued until the required return is submitted, so even if you pay all that is demanded, they will continue to take action in order to get that return submitted. Generally this means daily penalties. Therefore, it is not in your interest to always submit your returns in a timely manner.
There are some instances where, if you do owe tax, you are allowed to pay it over time. Although tax should always be paid when it falls due, the RMS allows some people to pay their tax over a period of weeks, months or longer, in certain circumstances. This does mean, however, that interest will be added to the total amount due, but it’s possible this interest will be small. Generally  in these instances the RMS will keep reminding you that interest is being added to the total because they have no discretion and are unable to freze interest in order to help you clear the debt quicker.
Interest rates on unpaid tax is actually lower than is commonly believed, right now it is set at 6.5% per annum. As an example, being one month late on a tax bill of £2,000 means you are charged £11.
Many people are afraid that failure to pay tax in a timely manner leads to criminal prosecution and imprisonment, but this rarely happens. The RMS does prosecute a few people each year, but these are mostly cases where the person is alleged to have been seriously dishonest or trying to evade the tax. The RMS won’t take this course of action simply because an individual has not paid tax on time or if they are having trouble finding money to settle. Yet, at the same time it is important to be aware of the risk that the RMS may try to obtain a court judgment against you for the unpaid tax. If you fail to pay the tax after this you may receive a judgment summons which requires you to attend court and explain why you haven’t paid. Ignoring a judgment summons and not attending court could result in a prison sentence.
It is important to understand that you have rights when you are a taxpayer. The RMS must hold to a Service Commitment and under this, it promises to treat taxpayers fairly and with courtesy. When you have clear evidence that the person who has dealt with your case was rude, unfair or overly harsh then you have a right to complain and ask that another person be assigned to your case.
After you have been contacted regarding unpaid tax, you will want to consider what to do next:
- Do you believe the amount being demanded is incorrect? If you do then do not hesitate to take action in order to get the figure corrected
- If you believe that you do owe tax, but you can’t pay immediately then you want to work out an agreement with the RMS
- In the instance that you are unable to work an agreement out with the RMS you may face enforcement action so it is important to understand each of those procedures and which defences could help you most.
There are people who have never declared their income and as result do not receive any demands from the RMS because it is unaware that the person has earned any taxable income or has been misled regarding the total amount earned. This situation is dangerous because the person may end up receiving a penalty for failing to report their income and that means the risk of potential prosecution.
If you are dealing with tax arrears, the situation can be stressful due to the complexity so you may benefit from outside counsel. You could benefit from help getting things straightened out through either a Debt Management Plan or, in more severe instances where you owe fifteen thousand pounds or more, an Individual Voluntary Arrangement (IVA).
Get started today sorting these issues out because waiting only makes your life more stressful than it needs to be.

When You Can’t Pay Your Tax


In this article we want to explore the primary aspects of an inability to pay one’s tax.


Some terms to better help you understand this article are as follows:


Collector – The person who purses those who have not paid tax. Today these individuals are part of the RMS (Receivables Management Service). However, before a collector will pursue you, an initial application for payment is sent from one of the two Accounts Offices in either Cumbernauld or Shipley. If, instead local enforcement action must be taken for payment not having been made, the Recovery Office will deal with this matter. Usually, the Recovery Office is named after the city or town where it is located and this office has jurisdiction for the area in which you live or trade. In cases where a bankruptcy is involved, the EIS (Enforcement and Insolvency Service) in Worthing will get involved. Those employed by the RMS may contact you if your returns are outstanding, but they do not process your return themselves.


The issuing and processing of returns is handled by RMS offices which in this article will be called “tax offices” because that is what they are traditionally called in an unofficial sense. It’s important to realize that different people within the RMS have different roles so the “collector” who contacts you is usually a different person from the RMS who does not deal with your specific tax return – that would be the “tax office”.


Warning Signs of Impending Problems


Each year, thousands of individuals get into arrears with their tax. Normally, the individual is made aware of this situation when they see a debt on their Statement of Account. After a short time, a collector will generally get in touch via letter or telephone and ask for an immediate payment. It is important to remain calm and fight any sense of panic you feel.


The RMS can frighten people by threatening them with legal action, but it is still crucial that you don’t panic if this happens because the situation may not be as dire as it seems. Remain calm as you work through the situation and consider your options, as well as how you got into the situation.


The first thing to remember is that you should never ignore a statement of account or a demand from a collector because that is the worst action to take. If there is any chance that you can resolve your situation then you will want to act quickly because if you do nothing then you are inadvertently raising the risk that you will face legal action.


Remember, the amount being demanded could be incorrect. You may find that you disagree with what either the collector or the Statement of Account state is the amount of tax owed. In some instances your statment may include what is called a determination, which is an estimate and made because the tax return (or tax returns) have not been completed. If this is the case it can be corrected.


Unfortunately, the collector who is paid to pursue you for upaid tax may or may not be trained in how to understand the tax so you could well be wasting effort if you try to persuade them that the figure is incorrect. Generally you will need to contact your tax office to make the needed adjustments because they are the ones who deal with your tax return.


You will end up liable for penalties, surcharges, interest and tax charged on determination if you have not completed your tax return (or tax returns) which is not only correct, but enforceable until you have submitted a completed return. Once you have submitted the return the amount of tax will be revised so that they reflect the amounts shown on your return. Then you will only need to pay the revised debt plus interest and any outstanding penalties or surcharges that are still due in respect of the revised debt.


In cases of ‘non-return’, outstanding debts are pursued until the required return is submitted, so even if you pay all that is demanded, they will continue to take action in order to get that return submitted. Generally this means daily penalties. Therefore, it is not in your interest to always submit your returns in a timely manner.


There are some instances where, if you do owe tax, you are allowed to pay it over time. Although tax should always be paid when it falls due, the RMS allows some people to pay their tax over a period of weeks, months or longer, in certain circumstances. This does mean, however, that interest will be added to the total amount due, but it’s possible this interest will be small. Generally  in these instances the RMS will keep reminding you that interest is being added to the total because they have no discretion and are unable to freze interest in order to help you clear the debt quicker.


Interest rates on unpaid tax is actually lower than is commonly believed, right now it is set at 6.5% per annum. As an example, being one month late on a tax bill of £2,000 means you are charged £11.


Many people are afraid that failure to pay tax in a timely manner leads to criminal prosecution and imprisonment, but this rarely happens. The RMS does prosecute a few people each year, but these are mostly cases where the person is alleged to have been seriously dishonest or trying to evade the tax. The RMS won’t take this course of action simply because an individual has not paid tax on time or if they are having trouble finding money to settle. Yet, at the same time it is important to be aware of the risk that the RMS may try to obtain a court judgment against you for the unpaid tax. If you fail to pay the tax after this you may receive a judgment summons which requires you to attend court and explain why you haven’t paid. Ignoring a judgment summons and not attending court could result in a prison sentence.


It is important to understand that you have rights when you are a taxpayer. The RMS must hold to a Service Commitment and under this, it promises to treat taxpayers fairly and with courtesy. When you have clear evidence that the person who has dealt with your case was rude, unfair or overly harsh then you have a right to complain and ask that another person be assigned to your case.


After you have been contacted regarding unpaid tax, you will want to consider what to do next:


- Do you believe the amount being demanded is incorrect? If you do then do not hesitate to take action in order to get the figure corrected


- If you believe that you do owe tax, but you can’t pay immediately then you want to work out an agreement with the RMS


- In the instance that you are unable to work an agreement out with the RMS you may face enforcement action so it is important to understand each of those procedures and which defences could help you most.


There are people who have never declared their income and as result do not receive any demands from the RMS because it is unaware that the person has earned any taxable income or has been misled regarding the total amount earned. This situation is dangerous because the person may end up receiving a penalty for failing to report their income and that means the risk of potential prosecution.


If you are dealing with tax arrears, the situation can be stressful due to the complexity so you may benefit from outside counsel. You could benefit from help getting things straightened out through either a Debt Management Plan or, in more severe instances where you owe fifteen thousand pounds or more, an Individual Voluntary Arrangement (IVA).


Get started today sorting these issues out because waiting only makes your life more stressful than it needs to be.

    Debt Advice for Gay and Lesbian Couples

    While there is a rather unhelpful stereotype in the media that depicts the stereotype as wealthy gay male couples who both have incomes with neither having any children, the reality is often quite a bit different. Gay and lesbian people face as much debt as any other people in the UK.

    A community funded survey done in Brighton in 1999 showed that most gay couples in that community and in surrounding areas were living on annual incomes of less than £15,000.

    An income that low means that a couple cannot save against potential income interruptions or other unexpected misfortunes and that means there can be no real long term financial security. If there is no genuine ability to save for the future then it is quite difficult to plan for a future where uncertainty is the only given.

    Debt at this income level can be catastrophic for both partners, leading to needless stress and causing difficulties within the relationship itself, regardless of the lifestyle the couple leads together. If creditors are hassling you or your partner, then it is important not to let things go too far. Gay and lesbian couples face the same financial challenges that all couples face and because of this, they are able to benefit from the same solutions because all people are equal when it comes to financial and legal rights, as well as challenges.

    If your debt is still near being under your control then you may want a Debt Management Plan, a sensible solution to re-structuring your payments into a single payment you can afford. More severe debt may require an Individual Voluntary Agreement (IVA) that can help manage debt that’s gone too far. Even a bankruptcy may help if it’s gone so far that repayment is no longer an option for you.

    Don’t let debt control your life, seek help online where you can get quality advice from a trained professional.

    Debt from Disability

    Specialist Debt Support Unit
    Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.
    It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.
    In the UK, disability includes a variety of unique circumstances leading to debt that can include:
    - People with physical impairments that require medical equipment for daily living
    - People with mental health conditions that affect their everyday life
    - A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances
    - There are many types of sensory impairment that people suffer that can restrict their daily activities
    Reasons for Debt from a Disability
    There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:
    - In times of personal crisis, financial concerns go understandably neglected
    - Cost of respite care can lead to or increase debt
    - Disability transport costs can lead to debt
    - Cost of hiring people to provide care if one’s family cannot
    - Because financial concerns are not focused on, benefits may not be claimed as they should
    - Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability
    - Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind
    - Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself
    - Debt repayments can wreak havoc on already limited and fragile income
    The Connections Between Disabilities and Debt
    A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.
    These situations mean that debt is created in one or more of the following ways:
    * Typically, a combination of circumstances and factors lead to debt form disability
    * Costly, recurring purchases of specific items that are required by a disabling health condition
    * Not enough assistance from the benefits system or none at all
    * Often dealing with a disability means high telephone bills and high fuel bills
    * At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle
    * Expenses associated with a disability can lead to debts
    * There can be a frequent need to replace cruical furniture
    * Alteration of accomodations may be required
    * A move may be needed to have a situation with better accomodations for the disabled
    * Bearing the cost of replacing items damaged by a child with behavioural problems
    * Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis
    * Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker
    Job Options and the Employment Market for Those with a Disability
    Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.
    A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.
    Deferring Payments on Debt from Disability
    If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.
    Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.
    If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.
    If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.
    The Impact from Disability-related Debt on Those Caring for Disabled People
    Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.
    In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.
    The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.
    Mental Health Issues and Their Role on Disability-related Debt
    Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassaing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.
    For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.
    How Creditors Respond to Those with Disabilities Who Are in Debt
    Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.
    The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.

    Specialist Debt Support Unit

    Debt problems faced by those with disabilities are often a combination of circumstances associated with the disability and related to having a low income that often results from physical setbacks. This lack of income can greatly increase the vulnerability to debt that people with disabilities experience, as well as restrict their access to basic services of necessity.

    It’s been highlighted in the past that people living with disabilities face financial difficulties as an inherent side effect of their physical restrictions. Disabled people with debt concerns specifically face the consequences for the fact that their problems tend to stay hidden unless they have a particular means by which to deal with these problems.

    In the UK, disability includes a variety of unique circumstances leading to debt that can include:

    - People with physical impairments that require medical equipment for daily living

    - People with mental health conditions that affect their everyday life

    - A wide variety of learning-related difficulties can hinder understanding of aspects of debt and finances

    - There are many types of sensory impairment that people suffer that can restrict their daily activities

    Reasons for Debt from a Disability

    There are a huge number of situations and factors that can lead to debt problems for those who are disabled that affect their lives and those who provide them with help. Here are just a few things possibly influential aspects:

    - In times of personal crisis, financial concerns go understandably neglected

    - Cost of respite care can lead to or increase debt

    - Disability transport costs can lead to debt

    - Cost of hiring people to provide care if one’s family cannot

    - Because financial concerns are not focused on, benefits may not be claimed as they should

    - Those who offer unpaid care often reduce their own finances to do so and their quality of life suffers as they try to help meet the needs of another suffering from a disability

    - Often there can be a sudden drop in income when benefits halt or at the onset of the disability as a job is lost or a career left behind

    - Dealing with debt can be difficult for those who experience a decline in their mental or physical health due to the stress of the debt itself

    - Debt repayments can wreak havoc on already limited and fragile income

    The Connections Between Disabilities and Debt

    A great majority of those seeking debt help related to disabilities are either disabled people themselves or those who offer care. Often, one or both of these types of individuals are at a low income level or living in poverty.

    These situations mean that debt is created in one or more of the following ways:

    * Typically, a combination of circumstances and factors lead to debt form disability

    * Costly, recurring purchases of specific items that are required by a disabling health condition

    * Not enough assistance from the benefits system or none at all

    * Often dealing with a disability means high telephone bills and high fuel bills

    * At the onset of a disability or serious illness, debt can be acquired quickly as a person adjusts to the changes in lifestyle

    * Expenses associated with a disability can lead to debts

    * There can be a frequent need to replace crucial furniture

    * Alteration of accommodations may be required

    * A move may be needed to have a situation with better accommodations for the disabled

    * Bearing the cost of replacing items damaged by a child with behavioural problems

    * Those unable to use public transport may need to travel back and forth from the hospital by expensive taxis

    * Income changes for those who take on the responsibility of caring for a disabled person, often the benefits do not match a previously earned salary for the care taker

    Job Options and the Employment Market for Those with a Disability

    Many disabled people experience a rapid accumulation of debt as they go through the process of adjusting to a disability or chronic illness. Even for those who find employment, the smallest alteration or additional demand put on their income could trigger debt struggles. Another reality is that merely being disabled can keep people excluded from obtaining a job. Despite strict UK employment laws, disabled people can experience difficulties if they are unable to seek work or work average hours.

    A change in income like the loss of benefits or the earnings of a partner can also trigger debt. For those depending upon benefits long term, debts can not only be difficult to deal with, but may reoccur, as well. Just because a person is in receipt of DLA (Disability Living Allowance) does not guarantee that other goods and services are somehow affordable. Many times a person’s entire benefits end up being used to repay debts or simply meet general bills of the household.

    Deferring Payments on Debt from Disability

    If you have a disability you may need help deferring bills you cannot avoid as well as expenses such as rent or a mortgage or even council tax, heating bills and other basic expenditures. It is a good idea to contact bank or building society managers to arrange your mortgage and explain your situation if you are struggling with mortgage repayments.

    Often building societies are prepared to suspend your payments for a few months to give you a chance to sort out your finances. It is extra helpful if you can have a social worker explain your situation in a report to give it extra validity in their eyes. You can also seek to extend your mortgage term in order to pay less monthly or even get it arranged so that you make interest-only payments in order to reduce your monthly expenses. You can often seek help paying the interest on your mortgage from the Department of Social Security.

    If you speak with your local council office you may be able to defer your council tax payments and even get in touch with your local gas, water, telephone and electricity providers if you are experiencing difficulty making payments for these essential services.

    If you have a neighborhood Law Centre near you, they may be able to advise you on issues regarding repayments. Get in touch with the Law Centres Foundation to learn more.

    The Impact from Disability-related Debt on Those Caring for Disabled People

    Giving care to a disabled individual can be both emotionally and physically demanding, especially in cases where there is no additional support or respite care. It can be exceedingly difficult for those caring for the disabled person to reduce debt problems by seeking work because they are severely limited by the need to care for the person and lack appropriate and affordable alternatives to the care they provide, not to mention adequate support for the recipient of that care.

    In many households, the lost of the person giving care’s income has been a primary cause for taking on debt. This is usually because the person providing the care must give it full time and can no longer work their previous job. This, then, leads to effects on the quality of life for both them and the disabled person they are providing care to.

    The benefits income the disabled person is able to receive often sets the standard of living for their family or plays a large role in that aspect of family finances. In instances where the disabled person leaves the home or even dies, that loss of benefits can cause or worsen existing debt problems in a way that affects the entire family.

    Mental Health Issues and Their Role on Disability-related Debt

    Many people feel that the onset of depression, anxiety or other mental health problems begin the process of debt from disability. Those with previously existing mental health issues find that there can be serious consequences to coping with debt related stress. An unsympathetic and harassing creditor, as an example, can really tax some people’s health and ability to cope. Beyond this, as horrific as it sounds, many dealing with mental health issues or other disability have been driven to the point of considering suicide simply out of a sense of alienation, helplessness and despair.

    For some people, physical health issues have been worsened by anxiety over debt caused by illnesses. It’s extremely difficult to resolve debt when a person is already dealing with debt on top of mental health problems. It can make taking even the simplest steps to help one’s self excruciatingly difficult.

    How Creditors Respond to Those with Disabilities Who Are in Debt

    Creditor’s harassment, like barrages of telephone calls, ends up being not only damaging to the well-being of the disabled, but also extremely inefficient as a means of recovering debt. In some instances, the methods of debt repayment offered by creditors are not suited to people dealing with a certain impairment. Failure to provide adequate communication means or inaccessible buildings hinder a disabled person’s ability to negotiate with creditors, as well.

    The means by which creditors help those in debt who face disabilities has a strong effect not only on the state of mind and sense of well-being for that person, but their very ability to resolve a debt issue. It has echoes that, in fact, affect all members of society in the UK.

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