Published 13 July 2018 · Last reviewed 13 July 2018 · Older article — see current rates
Frequently asked questions on how to get a Mortgage to pay a tax bill
We are getting more and more enquires around getting a Mortgage to pay a tax bill and stopping HMRC proceedings. It could be that when HMRC stopped accepting payment of tax bills by credit cards on 13th January 2018 mortgages become a preferred option?
Firstly, I must point out that the sooner you deal with HMRC tax matters the better. It’s vital you keep in dialogue with HMRC as this is the best way you can try to resolve any issues which may have arisen as a result of a Tax enquiry. To get in touch with HMRC please click here.
When it comes to the Mortgage Lenders that lend to applicants with HMRC debts are normally centralised and do not have branch networks. The mortgage process is not as dynamic or instant as credit cards and it will typically take 3 to 5 weeks for an approval. Again it’s best not to leave things to the last minute as getting a mortgage or remortgage for Tax bill will require quite a lot of documentation to be provided by you.
Frequently asked questions on Mortgage to pay a tax Bill
Q: What Mortgage Lenders allow capital raising for tax bill repayment?
A: Specialist ones, and not probably brand names that you will be familiar with. I think its also fair to say that the majority of these lenders only really work within the broker market so it’s a good job you’re here on our site.
Q: How may Mortgage Lenders can lend for the repayment of a tax bill?
A: In terms of first charge Mortgage Lenders only a few. There are a greater number of mortgage providers on a second mortgage basis otherwise known as secured loans that can help with a Mortgage to pay a tax Bill. They all have very different criteria on repaying HMRC tax bills and income and affordability rules.
Q: Will the whole bill have to be repaid?
A: In our experience: “Yes”, the full balance will need to be paid back on the completion of the mortgage.
Q: I’m currently in a payment plan with HMRC can I keep this running and just mortgage to clear this year’s tax bill?
A: No, the full balance will need to be paid back on the completion of the mortgage.
Q: Will the fact I’m in a tax bill payment plan with HMRC count against my chances of being successfully accepted for a mortgage?
A: Not necessary, it could be a good thing if the communication and co-operation was there with HMRC ahead of payment problems.
Q: I need to raise money to repay a tax bill which occurred when I was self employed, I’m now employed does this help?
A: Yes, Lenders would ideally like to isolate the tax bill to a previous occupation.
Q: What type of tax bill is acceptable to mortgage lenders?
A: There various types of tax e.g. income tax, capital gains, corporation tax etc. The Mortgage Lenders each have a difference stance, but generally, corporation tax is more widely accepted as it is categorised as “business” rather “personal” debt.
Q: How many years’ worth of tax can be consolidation into a mortgage?
A: There is no ‘hard and fast’ rules, but generally the Mortgage Lenders do NOT long-standing or repetitive instances of tax bill evasion. If the tax bill is older than 2 tax years your chances of acceptance will be considerably reduced on a first charge mortgage so you may have to opt for a second charge mortgage and look to consolidate at a later stage. As a second charge mortgage is a secured loan you will need to already own property with a 1st charge mortgage. Its also worth knowing that some mortgage lenders who are no longer lending may not allow the second charge so its always worth speaking to brokers to identify your options when looking for a Mortgage to pay a tax Bill,
Q: HMRC has filed for bankruptcy due to unpaid tax bills – what are my options?
A: Most Lender’s do not like this situation as it proves the situation has gone on too long without being dealt with. However, there is a solution which involves a solicitor undertaking and the interest rate will be very high but we can still try to help but you better get a move on.
Niche Advice offers suitable advice on applicants looking for a Mortgage to pay a tax Bill and can look at standard remortgage and secured loans options. To find out more please complete the Contact Form on this website or call 0207 993 2044.