The Tax Returns Were In. The Bill Was Unaffordable.
I work as a tree surgeon — self-employed, physical work, not the kind of job where you're thinking about tax returns every January. But 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. It wasn't a surprise, exactly — I'd known things were behind — but seeing the actual number from HMRC made it feel very real.
I rented my home, so I didn't have property to worry about. But I did have my tools and equipment, including a specialist wood chipper vehicle I use for the work. That was something I was anxious about from the start — whether I'd be able to keep working if things went further.
My accountant contacted Lightside on my behalf. They reviewed my situation and explained that bankruptcy could write off my entire tax liability, along with any other unsecured debts I had. What I hadn't considered was the timing. It was January, and Lightside explained that if I waited until after the 5th of April, the current tax year's liability — which would otherwise crystallise as another debt — could also be caught by the bankruptcy and written off. That wasn't a reason to delay indefinitely, but it was a meaningful difference.
I instructed Lightside to help me through the process. I went bankrupt, got my fresh start, and came out the other side still working. My accountant and I have a proper system in place now — I set aside 20% of my self-employed income for future tax as I go. It should never get to this point again.
The Outcome in brief
Advised by Priti Shah · Lightside Financial
Mr. JB arrived carrying the weight of a tax bill he couldn't see a way past — and the added anxiety of not knowing whether his tools and his livelihood would survive the process. By the time we'd talked through his options, including the timing consideration that would maximise what the bankruptcy could write off, the path forward was clear rather than frightening. He came through it working, debt-free, and with a system in place that means this won't happen again.
Facing an HMRC debt you can't pay?
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The work behind the outcome
Mr. JB went through the bankruptcy process with our support and was discharged in the usual way. His tools of trade, including his wood chipper vehicle, were protected as assets essential to his livelihood — bankruptcy rules provide for this. He came through the process still working, with his professional equipment intact, and with a proper tax management system now in place with his accountant. The debt is gone. The fresh start is real.
When Mr. JB's accountant came to us, the picture was clear: a self-employed individual with an unaffordable HMRC income tax liability, no property, and a need for a clean resolution rather than years of managed debt. We reviewed his full position and recommended personal bankruptcy — not as a last resort, but as the right answer for his circumstances.
The timing of the bankruptcy was the key practical decision. Mr. JB came to us in January. Under bankruptcy rules, a liability is written off if it exists at the date of the bankruptcy order. The current tax year had not yet ended, which meant a further liability was accumulating. By waiting until after the 5th of April — the start of the new tax year — that year's liability could also be included in the bankruptcy estate and written off. We advised Mr. JB of this and he agreed to wait. The additional months made a meaningful difference to the total debt he left behind.
Mr. JB went through the bankruptcy process with our support and was discharged in the usual way. His tools of trade, including his wood chipper vehicle, were protected as assets essential to his livelihood — bankruptcy rules provide for this. He came through the process still working, with his professional equipment intact, and with a proper tax management system now in place with his accountant. The debt is gone. The fresh start is real.