HMRC Time to Pay Arrangements

What do Time to Pay Arrangements do?

Most Companies have to prioritise trade suppliers in order to keep the business running and so fall behind with Tax debts without ever intending to. Alternatively, you may have received a Tax Assessment or been subject to a Tax Investigation which has resulted in an unforeseen liability.

As HMRC do not always issue a warning saying that they intend to issue a winding up petition, it is important not to delay dealing with the debt once you know HMRC have become aware of it. A Time to Pay Arrangement is a type of repayment plan made with HMRC to satisfy the outstanding debt, therefore preventing them taking further recovery action.

How HMRC Time to Pay Arrangements Work

A Time to Pay Arrangement is an agreement between your Company and HMRC to pay your Company’s tax over a period of time rather than on the due date.  The exact monthly payment and duration of the agreement are tailored to each individual Company but are usually over a short period and are only granted for periods over more than 1 year in exceptional circumstances.

HMRC are not able to agree to a reduction in the tax due in any circumstances and very rarely agree to deferred payments instead preferring payments to be regular and start immediately.

When proposing a HMRC Time to Pay Arrangement, it is important that the following key considerations are complied with in order to get support from HMRC:

• HMRC must be satisfied that you cannot pay the debt by the due date;
• The proposals made must have a realistic chance of being adhered to and completed;
• You must pay all other taxes outside the Time To Pay Arrangement as the fall due;
• The period of the Time To Pay Arrangement must be as short as possible;
• The Time To Pay Arrangement must cover the full debt owed.

If you initially agree a Time to Pay Arrangement with HMRC and then subsequently seek to extend the period, or worse still, default on the agreement, HMRC will usually cancel the Time to Pay Arrangement. This leaves you in a difficult position as HMRC very rarely agree to a new Time to Pay Arrangement where a Company has failed to complete one previously.

Because of this, you are likely to be better off instructing us to prepare a HMRC Time to Pay Arrangement proposal on your behalf. We regularly put forward HMRC Time to Pay Arrangement proposals for clients and as a result are better able to put together a plan that will work for you as well as maximising the period HMRC will allow the debt to be paid over.

Alternatively, you may be better off considering a formal insolvency process such as a Company Voluntary Arrangement, Administration or Creditors’ Voluntary Liquidation.  We will always provide an overview of these alternative options when discussing your Time to Pay Arrangement with you in order that you can properly understand all of the options available to your Company.

We can prepare a Time to Pay Arrangement proposal based on your Company’s financial position that will be viable for you in the long term and acceptable to HMRC.  We can also advise you on alternative courses of action be it additional funding or business restructuring so that you can be sure you have chosen the best way forward.

Our Service

When you get in touch with us, you will speak directly to a licensed Insolvency Practitioner from the outset.  We will take the time to understand your Company’s financial position, what your future intentions are for the business and ultimately what outcome you are hoping for.

We can prepare a Time to Pay Arrangement proposal based on your Company’s financial position that will be viable for you in the long term and acceptable to HMRC.  We can also advise you on alternative courses of action be it additional funding or business restructuring so that you can be sure you have chosen the best way forward.