01275 859143 Testimonials
Lightside Financial

HMRC Debt & Tax Arrears

Whether you owe money to HMRC and don’t know where to start, or you are already facing a demand, a rejected repayment plan, or a threat of bankruptcy proceedings — the right advice, taken early, makes a significant difference to what is possible. We understand how HMRC operates and what the insolvency framework actually allows.

For professional advisers
Completely Confidential
No charge for initial conversation
FCA Authorised & Regulated
We work for you, not your creditors

HMRC operates differently from banks and commercial creditors

Banks will negotiate because settlement is often in their commercial interest. HMRC’s own guidance is clear: they are not a bank. Time-to-pay arrangements are available, but they are typically structured to clear the full debt within a defined period of time — and if those terms cannot be met, HMRC will pursue enforcement.

We work regularly alongside accountants, solicitors, and tax investigation specialists on HMRC cases — bringing the debt resolution piece to the table when their client’s position requires it.

For professional advisers
What a good outcome looks like

What we are working towards for you

HMRC enforcement stopped while a solution is properly put in place
A time-to-pay arrangement you can actually sustain — not HMRC’s default terms
Debt written off entirely, where bankruptcy is the right route
Your home protected, where circumstances and assets allow
Assets held in trust or on behalf of others properly excluded from any bankruptcy estate
A bankruptcy order annulled, where the grounds exist to challenge it
HMRC is not the last word. The insolvency framework gives you more room than most people realise — and we know exactly where it is.

Not sure where you stand with HMRC?

The hardest step is the only one you need to take on your own. No charge for the initial conversation. No obligation to proceed. Completely confidential.

Call 01275 859143
Real cases, real outcomes

Three situations. Three very different solutions.

Personal — HMRC
Tax Return Filed, Debt Unaffordable — but BTL Properties Saved
Mr. CR — Private chauffeur, Watford — £44,000 HMRC debt, two properties at risk
Property Saved 3 mths — Discharged
The Situation

“I hadn’t filed my tax returns for several years. When I finally did, the bill was around £44,000 — and HMRC wanted £5,000 a month to clear it. What made it far worse was that two properties appeared to be in my name. They weren’t mine — they belonged to my teenage step-daughters.”

What We Did

We established that both properties were beneficially owned by Mr. CR’s step-daughters — not by Mr. CR — and built the evidence case: source of deposits, documented intention at the time of purchase, and the written trust arrangement in favour of the step-daughters. We presented that case to the bankruptcy trustee with sufficient clarity that the trustee accepted the position without dispute. Both properties were excluded from the bankruptcy estate entirely. Mr. CR was discharged from bankruptcy within three months — nine months ahead of the standard twelve-month term.

Adviser: Barry Mitchell. Referred by Kam Sira, Accountant, TaxAssist — Watford.
Full case →
Personal — HMRC
Retired Sole Trader Faced £300,000 HMRC Debt — Home Saved
Mr. A — Retired restaurateur, Richmond — £300,000 HMRC demand, home equity c. £600,000 at risk
£94k Agreed
The Situation

“I had done everything right. Paid off my mortgage. Handed the business to my son. And yet here I was, facing bankruptcy for debts I had never incurred.”

What We Did

Nearly twelve months of sustained negotiation with the Trustee in Bankruptcy. The Trustee opened claiming 100% of the family home — threatening a forced sale. We argued comprehensively that the family held a beneficial interest; the Trustee conceded that the bankrupt’s interest was 32%. We disagreed. We pressed that Mrs. A had 50% of the 32% interest, despite the Trustee’s lawyers claiming she didn’t. They eventually relented. With the beneficial interest settled at 16%, the Trustee sought £107,000. Lightside’s opening offer had been £100,000. We continued to negotiate them down. Settlement: £94,000. Home secured.

The negotiation — how it actually happened
Trustee opens
100%
£650k or
full debt
→
Lightside argues
32%
family has
interest
→
Lightside presses
16%
Mrs A holds
50% of 32%
Trustee wants
£107k
16% of £650k
→
Settled
£94k
below opening
offer
Adviser: Priti Shah. Lightside working with N. Saha & Co Ltd, Chartered Accountants, and Tax Gains, Tax Investigations.
Full case →
Personal — HMRC & Bankruptcy
The Bankruptcy Order That Should Never Have Been Made
Mr. G — FCA-registered sole trader — VAT debt, bankruptcy order made, FCA authorisation at risk
Bktcy Annulled £60k v £194k
The Situation

“I knew exactly what a bankruptcy petition was. When I walked into that meeting on the Friday afternoon, I already understood what I was looking at. The hearing was four days away. HMRC were claiming £60,000.”

What We Did

Lightside secured an emergency adjournment of the bankruptcy petition hearing at four days’ notice and paid £10,000 at court on the day. When the bankruptcy order was subsequently made — after Mr. G allowed the eight-week window to pass — Lightside took the case on in full and applied for annulment on the grounds the order should never have been made. That specific legal basis mattered: it would, if the application succeeded, remove the bankruptcy from all records entirely, preserving Mr. G’s FCA authorisation. HMRC contested the application and raised their demand from the original £60,000 to £194,000. Lightside challenged the revised figure successfully: the annulment was granted on the basis of the original £60,000 petition debt. The bankruptcy was annulled, the record was cleared, and his FCA registration was preserved.

Adviser: Priti Shah. Referred by Andrew Rhodes, Partner, Sobell Rhodes LLP — www.sobellrhodes.co.uk via BNI.
Full case →

Not sure where you stand with HMRC?

The hardest step is the only one you need to take on your own. No charge for the initial conversation. No obligation to proceed. Completely confidential.

Call 01275 859143
For professional advisers
Referring a client with an HMRC problem?
See how Lightside works with accountants, solicitors, and tax investigation specialists — and how to make a confidential referral enquiry.
Referring a client

When your client’s HMRC problem has become the issue you can’t resolve for them

Accountants, solicitors, and tax investigation specialists refer clients to Lightside when an HMRC liability has reached the point where debt resolution — not just tax advice — is what is needed. The referral is usually triggered by one of a handful of recognisable situations, and if any of these are familiar, an initial discussion costs nothing and is completely confidential.

We take over the debt matter entirely. Your client’s relationship with you remains intact. We keep you informed at whatever level of detail is useful, and we work to a conclusion — not just an initial assessment.

Lightside is FCA-authorised. Most of the HMRC cases on this page were referred by professionals: accountants whose clients had received unaffordable time-to-pay terms, solicitors handling estates where an HMRC liability had emerged, and tax investigation specialists who needed the insolvency framework properly handled alongside the investigation.

Client has received a time-to-pay rejection or unaffordable terms HMRC’s default TTP terms are often impossible to meet. We can assess whether a renegotiated proposal is viable, or whether an alternative route — IVA, bankruptcy — produces a better outcome.
HMRC has issued a statutory demand or bankruptcy petition This is where timing matters most. The options available depend heavily on how quickly advice is taken. Early referral — before a hearing date is set — consistently produces better outcomes.
Assets in the client’s name that may not form part of their estate Properties held on trust for others, beneficial ownership arguments, family home equity questions — these require careful preparation and clear evidence presented to the trustee. It is precisely the work we do.
A sole trader or retired business owner whose liability is personal Where the business has closed or passed on but the HMRC registration remained, the resulting liability falls personally. We have handled exactly these situations and know what the trustee will and won’t accept.
Make a referral enquiry

Talk to us about your client

Initial referral discussions are completely confidential. You do not need your client’s permission to make a speculative enquiry. Anonymised details are fine at this stage.

Call 01275 859143

Cases referred by professionals

Personal — HMRC
Retired Sole Trader Faced £300,000 HMRC Debt — Home Saved
Mr. A — Retired restaurateur, Richmond — home equity c. £600,000 at risk
£94k Agreed
The Situation

“I had done everything right. Paid off my mortgage. Handed the business to my son. And yet here I was, facing bankruptcy for debts I had never incurred.”

What We Did

Nearly twelve months of sustained negotiation with the Trustee in Bankruptcy. The Trustee opened claiming 100% of the family home — threatening a forced sale. We argued comprehensively that the family held a beneficial interest; the Trustee conceded that the bankrupt’s interest was 32%. We disagreed. We pressed that Mrs. A had 50% of the 32% interest, despite the Trustee’s lawyers claiming she didn’t. They eventually relented. With the beneficial interest settled at 16%, the Trustee sought £107,000. Lightside’s opening offer had been £100,000. We continued to negotiate them down. Settlement: £94,000. Home secured.

The negotiation — how it actually happened
Trustee opens
100%
£650k or
full debt
→
Lightside argues
32%
family has
interest
→
Lightside presses
16%
Mrs A holds
50% of 32%
Trustee wants
£107k
16% of £650k
→
Settled
£94k
below opening
offer
Adviser: Priti Shah. Lightside working with N. Saha & Co Ltd, Chartered Accountants, and Tax Gains, Tax Investigations.
Full case →
Personal — HMRC
Tax Return Filed, Debt Unaffordable — but BTL Properties Saved
Mr. CR — Private chauffeur, Watford — £44,000 HMRC debt, two properties excluded from estate
Property Saved 3 mths — Discharged
The Situation

“I hadn’t filed my tax returns for several years. When I finally did, the bill was around £44,000 — and HMRC wanted £5,000 a month to clear it. What made it far worse was that two properties appeared to be in my name. They weren’t mine — they belonged to my teenage step-daughters.”

What We Did

We established that both properties were beneficially owned by Mr. CR’s step-daughters — not by Mr. CR — and built the evidence case: source of deposits, documented intention at the time of purchase, and the written trust arrangement in favour of the step-daughters. We presented that case to the bankruptcy trustee with sufficient clarity that the trustee accepted the position without dispute. Both properties were excluded from the bankruptcy estate entirely. Mr. CR was discharged from bankruptcy within three months — nine months ahead of the standard twelve-month term.

Adviser: Barry Mitchell. Referred by Kam Sira, Accountant, TaxAssist — Watford.
Full case →
Personal — HMRC & Bankruptcy
The Bankruptcy Order That Should Never Have Been Made
Mr. G — FCA-registered sole trader — HMRC demand resisted from £194,000, annulment on original £60,000
Bktcy Annulled £60k v £194k
The Situation

“I knew exactly what a bankruptcy petition was. When I walked into that meeting on the Friday afternoon, I already understood what I was looking at. The hearing was four days away. HMRC were claiming £60,000.”

What We Did

Lightside secured an emergency adjournment of the bankruptcy petition hearing at four days’ notice and paid £10,000 at court on the day. When the bankruptcy order was subsequently made — after Mr. G allowed the eight-week window to pass — Lightside took the case on in full and applied for annulment on the grounds the order should never have been made. That specific legal basis mattered: it would, if the application succeeded, remove the bankruptcy from all records entirely, preserving Mr. G’s FCA authorisation. HMRC contested the application and raised their demand from the original £60,000 to £194,000. Lightside challenged the revised figure successfully: the annulment was granted on the basis of the original £60,000 petition debt. The bankruptcy was annulled, the record was cleared, and his FCA registration was preserved.

Adviser: Priti Shah. Referred by Andrew Rhodes, Partner, Sobell Rhodes LLP — www.sobellrhodes.co.uk via BNI.
Full case →
Personal — HMRC
The Tax Bill Was Real — but Future Debt Was Written Off
Mr. B — Self-employed tree surgeon, Slough — HMRC income tax liability, tools of trade protected
100% of debts written off
The Situation

“The returns had fallen behind, and when I finally caught up with my accountant and got everything submitted, the liability that came back was more than I could afford to pay.”

What We Did

Mr. JB’s accountant brought the case to us. The HMRC income tax liability was unaffordable and had no viable repayment route — bankruptcy was the right answer, not a managed arrangement that HMRC may not even have agreed to. The key practical decision was timing: Mr. JB came to us in January, and by waiting until after 5 April, the current tax year’s accumulating liability could also be caught by the bankruptcy order and written off. His specialist tools of trade — including his wood chipper vehicle — were protected throughout as assets essential to his livelihood. Mr. JB was discharged in the usual way. The debt is gone; his tools are intact; his accountant has a tax management system in place going forward.

Adviser: Priti Shah. Referred by Mr. JB’s accountant.
Full case →
FCA Authorised & Regulated Firm Reference 676943 — your client is advised by a regulated firm throughout
Your client relationship is protected We work alongside you, not instead of you — your relationship with your client remains intact
Speculative enquiries are confidential You can discuss a client situation with us before any referral is made — no commitment required
HMRC cases are our specialism Time-to-pay, bankruptcy timing, asset protection, trustee negotiation — we handle what falls outside generic debt advice

Start the conversation

Find out where you stand with HMRC

No charge for the initial conversation. No obligation to proceed. Completely confidential.

Call 01275 859143

Questions people often ask about HMRC debt

Yes — HMRC has the power to petition for your personal bankruptcy if you owe more than £5,000 and have not paid or agreed acceptable terms. Unlike commercial creditors, HMRC treats this as a routine enforcement tool rather than a last resort. However, a petition does not make bankruptcy inevitable. There are several ways to respond — including challenging the petition, negotiating an acceptable payment proposal, or in some cases making your own bankruptcy application on more favourable terms.

Yes. HMRC debt — including income tax, self-assessment arrears, VAT, and NIC — is treated as an unsecured creditor in a personal bankruptcy and is written off at the point of discharge, which is typically 12 months after the bankruptcy order. The timing of when you enter bankruptcy can also affect which tax year liabilities are included — something that requires careful planning.

A time-to-pay arrangement is a formal agreement with HMRC to pay your debt in instalments. HMRC will consider one where you can demonstrate genuine affordability — but their default terms typically require the full liability to be cleared within the current tax year, which many people cannot achieve. A well-prepared proposal, supported by evidence of your actual income and outgoings, gives the best chance of agreeing terms that are sustainable. If HMRC declines or the terms cannot be met, there are other routes available.