HMRC Time To Pay Arrangement
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Over recent years HMRC have taken a hard line in connection to arrears . Where HMRC are different to other creditors is that when they become aware of high levels of arrears, they are quick to start formal recovery action such as instructing bailiffs or issuing a winding-up petitions, which can be fatal for businesses.
A lot of Companies that end up in tax debt have prioritised trade suppliers to keep the business running and so fall behind with Tax debts without ever intending to. Alternatively, the Company may have received a Tax Assessment or been subject to a Tax Investigation which has resulted in an unforeseen liability.
As HMRC are using their enforcement powers more often these days, it is important not to delay dealing with the debt once you know HMRC has become aware of it.
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.
Key Elements Of HMRC Time To Pay Arrangements
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.
Alessandro Sidoli
Licensed Insolvency Practitioner
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.
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.
Client Testimonials
The team at Company Advice Centre really took the time to understand my situation and were always quick to help when I had any questions. It wasn’t an easy decision to close my business but having the support Company Advice Centre provided really helped me to move on.
My business was in trouble and I really did not know what to do. Company Advice Centre explained all of the options available to me in a manner that was easy to understand. I was able to decide on the solution that suited me and my business without being put under any pressure and was supported throughout the whole process.
When I called Company Advice Centre my business needed urgent help. I had received a winding up petition and a threat of bailiff action. When I explained the situation, one of the Insolvency Practitioners at Company Advice Centre came out to see me in person the next day. Because of this fast action I was able to place the company into Administration and save the business.