I can’t pay my tax bill — what should I do?

I am a self-employed hospitality worker. Since March 2020 my income has suffered and I am struggling to balance my books. For many months my main income was from the government’s Covid-19 support scheme and rental income from my family’s rural cottage over the summer. I am preparing my tax return but am very worried about the forthcoming deadline, as I don’t have the money to pay what is owed. Do you have any advice?

Dawn Register, head of tax dispute resolution at accountancy and business advisory firm BDO, says if you can’t afford to pay your tax in full and on time, the biggest mistake you can make is to ignore the problem. That will only make it more daunting.

HM Revenue & Customs has said it will not issue late filing penalties this year provided self-assessment taxpayers submit their return by the end of February. But if you can finish and submit it this month, you can work out exactly how much you owe for 2020-21. Don’t forget that payments received from the government’s self-employed income support scheme (SEISS) are taxable as part of your trading income.

This year HMRC says that provided tax due on January 31 2022 is paid by April 1 2022 (or an instalment plan is in place by then) it will not penalise taxpayers — though it will charge interest on the tax due from February 1 2022.

With any cash flow problem, the answer is to break it down into manageable chunks and that is exactly what HMRC offers through a “Time To Pay Arrangement” (TTPA). So once you have submitted your tax return to keep your tax records up to date, you can apply for payment by instalments through a TTPA.

If you owe less than £30,000, you can set this up online provided you can pay over the next 12 months. If you owe more, or need to pay over a longer period, contact HMRC’s Time to Pay helpline number for self-assessment on 0300 200 382.

As you are in the hospitality and leisure sector, if you already have a TTPA in place for past tax bills, HMRC should allow a delay in the current instalment payments if your business is affected by the economic impact of the Omicron variant — you just need to ask. In my experience, HMRC is trying to be sympathetic in cases of genuine financial hardship for individuals, especially those with a viable business who are taking steps to manage costs.

Regarding the family cottage rents, ensure that your tax return correctly reports all rental income received in the tax year ending April 5 2021. However, you can claim allowable expenses to reduce the tax due on rental income — this includes any agency fees paid to a rental agent or website service.

Here is HMRC’s latest guidance for individuals and businesses with tax bills they cannot afford to pay in full.

Has my father been coerced into changing his will?

I am concerned about my sister’s involvement in my father’s will. She and I do not have a good relationship. She has been arranging meetings with him in private and he often looks resigned or defeated afterwards. I wonder if she is exerting significant undue influence. He has reduced the inheritance which will be passed to me on his death. Meanwhile, my sister plans to rent a room in the heart of London, an expense I know she cannot afford on her current salary and savings. Am I able to challenge her behaviour under the grounds of undue influence?

Lucinda Brown, partner at law firm BDB Pitmans, says the situation that you describe does ring some alarm bells and I can see why you are concerned.

To succeed in the English courts in a challenge to the validity of your father’s will on the grounds of undue influence, you will need to prove that your sister coerced your father into changing the terms of his will.

Coercion amounting to undue influence can be difficult to establish, as it is in the nature of undue influence that it takes place behind closed doors when no one else is watching and usually by someone in a position of trust. Coercion is more than persuasion and persuasion itself is not unlawful. It usually involves threats or pressure of some description, such as the withdrawal of care or support.

For a successful challenge to the validity of the will following your father’s death you would need to show that he would not have made the will in the terms that he did were it not for the pressure and influence of your sister. If your sister encouraged your father to change his will and he was happy to do so for his own reasons and had capacity to effect the change, his decision to reduce provision for you and increase provision for your sister will stand.

If, on the other hand, it can be shown that your father was vulnerable, may have lacked capacity to make the new will, and the change to the will was inconsistent with his longstanding wishes, you may have enough to shift the burden of proof to your sister so that it is for her to demonstrate that the will was not brought about by undue influence, rather than for you to prove that it was.

Obtaining a copy of the solicitor’s will file following your father’s death may assist with the claim. The file may reveal if it was your sister who instigated the meeting between your father and his solicitor, if she was present at the meeting and if your father knew his own mind when instructing for the change to his will.

If no solicitor was involved in the drawing up of the new will and it was home-made, that in itself will be an additional cause for concern. Evidence from witnesses who were present at the signing of the will may also assist.

The court will conduct a detailed examination of the facts leading to the execution of the will and will also look at your father’s medical records to assess whether he may have been losing capacity at the date the will was signed. Old age, frailty and ill health will all assist the case that your father was vulnerable to influence.

As the will only takes effect on your father’s death, there are limited steps you can take while your father is still alive to prepare the ground for the potential claim on his death. You might consider discussing with your father his reasons for the change to his will so that you can establish his reasons.

This is of course a difficult topic to raise but it may assist you with ascertaining whether your father made the will of his own volition or not and provide you with some peace of mind. Equally, it may only serve to heighten your concerns and, if so, you should make a contemporaneous note of what he says to you.

You could also send a letter to your father’s solicitor highlighting your concerns, alerting them to the possible undue influence and asking them to take all necessary steps to satisfy themselves that their client was not subject to influence in relation to the will.

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.