When you don't pay HMRC debt, several consequences may follow, and the situation can escalate quickly. Here are some of the potential outcomes
Accumulation of Penalties and Interest
HMRC will apply penalties for late payment, which can increase over time. Additionally, interest charges will accrue on the outstanding debt, making it even more challenging to repay.
Take a Legal Action Against you
HMRC has the authority to take legal action to recover unpaid debt. This may involve court proceedings, and if a judgment is obtained, it could lead to further enforcement actions.
Enforcement Action or Bailiff Visit
HMRC can take various enforcement actions to collect the outstanding debt. They may issue a County Court Judgment (CCJ), which could affect your credit rating and hinder your ability to obtain credit in the future.
In extreme cases, if the debt remains unresolved, HMRC may use its powers to seize assets to recover the owed amount. This could include goods, equipment, or property.
Freezing your Bank Accounts
HMRC may freeze your bank accounts to recover the owed amount, leaving you without access to your funds until the debt is settled.
Loss of Tax Refunds
If you have overpaid taxes in the past and are eligible for a tax refund, HMRC may offset the refund against the outstanding debt, reducing or eliminating any potential refund.
Limited Access to HMRC Services
Individuals or businesses with outstanding debt may face restricted access to certain HMRC services until the debt is resolved.
HMRC can initiate recovery proceedings, leading to the potential liquidation or closure of businesses that fail to pay their tax liabilities.
Damage your Credit Rating
Unpaid HMRC debt can negatively impact your credit rating, making it harder to obtain credit or loans from financial institutions.
Garnishment of Wages
HMRC can instruct your employer to deduct the outstanding debt directly from your wages. This wage garnishment can significantly impact your disposable income.
Get Free Advice to Repay HMRC Debt
It's important to remember that you're not alone. Many people struggle to pay their HMRC debt. There is help available, so don't be afraid to reach out for assistance.
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