Tax Avoidance For Dummies

A while back I spent two years being self-employed as a contractor. I was annoyed with my previous employer, and liked the idea of having a little bit of freedom. As such I had to create my own little company. Holiday Fund may have been in the name. That was nice, but there was a certain amount of paper work to be filled in. It didn’t take long to do, but I had to be organised enough to do it when I had to.

When I went back into the proper workplace, I wound up the company and didn’t think anything more about it.

Everything was fine until five years later when I had a really mumbled message on my answering machine. By more luck than judgement I got the phone number to ring them back, and the following morning I rang them from my mobile in work.

After the pleasantries I received a bit of a bombshell. I was told that I owned HMRC, i.e. the tax man, a grand total of just over £118,000. Oh, I also had to pay them in three days or they were sending the bailiffs round.

You know that sometimes you hear something so outrageous that you are numb about it? Well, I was in that happy place. Outside of me going back to my old job as a male gigolo, I’ll leave you for a moment with that sight, there was no way that I was going to have sort of money ready in time, or ever even.

I then laughed out loud about how much the things I had a home was worth. The bailiffs would take one look at my things, feel sorry, and bring me new things.

It wasn’t the normal response you would get from a panic stricken worrier.

I attempted to find out the reason why I owned them money, but they couldn’t tell me.  I did have the name and number of a man at my local tax office who I could speak to about paying off my debt. So this was my second phone call of the morning.

The rather nice man at the tax office informed me that when I closed EHF (Emmett’s Holiday Fund) ltd there was no electronic record of the last page of one of my forms. As there was no page, I was in arrears for the taxes due on the year I had closed the company and each subsequent year, along with fines and interest on the money they invented.

I was a little bit concerned, as my forms were filled in by hand, and I asked what I needed to do to sort out the problem. The solution was for me to download a thirty page form from the interweb, put on the first page my name and company name and in the returns box enter NIL. Then sign the last page. Send the form back, and wait six weeks for it to be scanned into the system. If I didn’t hear anything back from them in about three months assume it’s all been sorted.

I did as requested, and quite some time later I haven’t heard anything back. It’s probably all sorted, but with my luck I now owe them a couple of million pounds. But not to worry, I’ve already decided what drapes I want in my prison cell, and I know where I can get a tin of pineapple chunks from. Let’s see if anyone gets that reference.

I also figured out why you need to keep your financial records for seven years. HMRC lives that far back in the past.

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