Dealing with priority debts: Income Tax and/or VAT arrears

THE HMRC OFTEN USES PRIVATE DEBT COLLECTION AGENCIES TO CHASE DEBTS.

Typically, this will only be relevant if you are self-employed. If you are in arrears for Income Tax and/or VAT, the relevant creditor will be the HMRC.


Making contact
You should contact the HMRC immediately. Interest will be added to the arrears. It may be possible to arrange for the arrears to be paid in instalments and, where you can prove financial hardship, for interest to be temporarily put on hold.


Additional considerations
It is important to check that your Income Tax liability has been correctly calculated.