Tax Debts also known as Revenue debts including overpaid benefits, self-assessment tax, VAT and PAYE/NIC generally cannot be included in a DMP although tax debt is an unsecured debt. The numbers of self-employed have increased over the years and now account for around 15% of the working population. It is not a surprise therefore that the numbers of individuals struggling with tax debts is increasing as well. Dealing with arrears of tax debts is not easy. HMR & C generally will pursue the strategy that tax debts need to be paid as they fall due and if not you risk getting penalties and will face action. The longer you leave it, the more difficult it is to achieve an agreeable payment plan with HMRC.

The main reason is that it will normally take many years to repay your debts in full using this type of informal debt solution and HMRC will not be prepared to wait that long for their money. First Credit Advice will help you to get an agreement for a separate ‘Time to Pay’ arrangement with HMRC which will get the outstanding tax paid within 12 to 24 months. Once this is in place you can then use whatever disposable income you have left to negotiate with your remaining creditors.