HMRC debts and Time to Pay Plans

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HMRC debts and Time to Pay Plans

A Time to Pay Arrangement (TTP) could allow your business to pay debts to HM Revenue and Customs (HMRC) over a longer period of time than would otherwise be available.

A TTP is commonly used to repay arrears of Corporation Tax, PAYE or VAT, but can be used where a company is up to date, but the financial controllers anticipate that there will be a problem in meeting future payments.

What will HMRC want to know?

HMRC will want information about the company before agreeing to provide additional time. Generally they must be satisfied that the request is genuine and will consider various factors, including the company’s filing and payment history.

Before you contact HMRC you will need to know:

  • What is owed?
  • When it is due?
  • How much the business can afford to pay, and when?

This must be supported by proper evidence, usually a cash flow forecast and information concerning the company’s assets and other liabilities.  Gathering this information can be daunting and you may wish to seek advice from an experienced Insolvency Practitioner who can negotiate with HMRC on your behalf.

How long will the company have to pay?

It is possible to negotiate TTP over a period of up to 12 – 18 months.  Our Business Debt Advisor team have in the past been able to negotiate longer TTP plans, but these were unusual cases and were supported by cash flows and a business plan. The amount of additional time offered by HMRC will be dependent on their review of the circumstances.

If the company has previously complied with its obligations, and has a good payment history, this will be advantageous.  It is not out of the question to negotiate TTP where the company has not met all of its obligations, but it will be more difficult.  NEVER ignore payment demands or threats of legal action.

What happens if TTP is agreed?

If a TTP arrangement is agreed the company must meet payments in full, and on time.  HMRC reserve the right to cancel the plan if it is not adhered to, which could result in them demanding the overdue balance in full, plus interest and penalties.   If the company cannot pay, contact HMRC straight away.

If your company is experiencing difficulty, please contact a member of The Business Debt Advisor team on 0333 9999 600, or have a read through our website for helpful information

Alternatively, you can contact Business Payment Support Service (BPSS) on 0300 200 3835.

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