Even if you are exhausted by the dispute process you may be able to reduce the debt, or rate of repayment, by requesting a Hardship Assessment.
Hardship assessments can mean that HMRC essentially say that your income is too low for them to expect you to make any repayments currently. This can be reviewed if your circumstances change. But if your income is very low, or your outgoings very high (i.e other debts, etc) you may qualify.
Let me explain how they do a hardship assessment. They will arrange to have a telephone appointment with you, giving you chance to get figures together.
During the appointment they add up all your 'allowable expenses', including all the obvious, rent etc, shopping, travel etc and include child’s costs, food for work and school, petrol, debts, professional costs, even clothes and birthday presents.
They then deduct this figure from your total current household income. Please note that HMRC can ask you to prove these figures by posting documents to them before they will accept the figures.
So say, just for ease of figures, they worked out £15,000 income, minus £13,000 costs equals £2,000 left. They call this £2000 your ‘disposable income’. They can then only take half of your disposable income as the repayment plan, which is £1000 over 12 months. So that would mean £83 a month repayment.
Your disposable income would have to be very low for them to agree that you did not need to repay anything currently. So if you have a lot of outgoings and very, very, little money left over, this may be the way forward. If the amount is very small or you have no disposable income HMRC should agree to delay recovery until your ‘circumstances have improved’.
Please note that it’s pretty unofficial as to whether HMRC will ever actually come back to you should they agree you are currently in hardship. You don’t have to be in complete dire straits to request a hardship assessment, but it will only get a bill totally written off sometimes if your finances are very tight.