HMRC Time to Pay Arrangements

Owe money to HMRC? A Time to Pay Arrangement could save your business from the challenges of VAT and PAYE problems.

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HMRC Time To Pay Arrangements

How we can help with HMRC Time To Pay Arrangements

✓ Guide you to a solution to overdue PAYE and VAT challenges

✓ Explain how a Time to Pay Arrangement could help your business through a difficult time

✓ Support you through negotiations to pay HMRC over a suitable period of time

✓ Discuss your financial situation confidentially and relieve your stress

HMRC Time to Pay Arrangements

What is An HMRC Time To Pay Arrangement?

It can be very stressful if your company falls behind with its VAT, PAYE, CIS tax or corporation tax obligations. If this has happened to you, or if you expect that cash flow challenges will make it difficult for you to pay in the future, you should seek expert advice at once.

HMRC is one of the UK’s largest business creditors and, in our experience, a majority of British companies owe some form of debt to the tax authority. In some cases, this can represent a significant financial burden that can make it hard for a business to continue operating. Trying to work through these problems alone, or hoping that they fix themselves, will only make matters worse. It is important to seek support from a corporate debt expert who can discuss your options and help you to identify the solution that best fits your circumstances.

Thankfully, there are options available for people whose companies cannot afford to pay their tax liabilities. These options include Time to Pay Arrangements, which are agreements that you can negotiate with HMRC to give your company extra time to make the tax payments you owe. Typically, this involves paying via monthly instalments over a set period of time, which can reduce the pressure on a business to pay straight away.

Our experience in advising on corporate debt solutions means we can assess your case, devise a persuasive and realistic argument to support your company, and negotiate with HMRC to agree a Time To Pay Arrangement on your behalf. It is important to act quickly as there may be serious consequences if you continue to delay making the payments you owe. Be proactive and call us now on 0800 999 0666 to discuss your options, or use the form on this page to request a call back.

Why Might I Need A Time to Pay Arrangement?

When a business has cash flow problems, tax payments like VAT and PAYE are often among the first things that are missed. Companies in this position usually need time to strengthen their procedures or resolve the causes of their cash flow worries, and this is where a Time to Pay Arrangement can help. By paying the tax money you owe over a longer period of time, you can work to address the causes of poor cash flow and recover your business successfully.

It is worthwhile for HMRC to grant Time to Pay Arrangements to viable businesses that are currently having cash flow problems as they will earn more tax revenues from companies that recover. However, HMRC will only agree if it is confident that you will be able to meet your payment terms. The best way to secure a Time to Pay Arrangement is with expert support and guidance.

The team at Company Insolvency Advice can assess your financial situation and advise you on whether this type of agreement would be suitable for you. From here, we can help you to build a case to support your application for an HMRC Time to Pay Arrangement, or discuss other options that may be more viable to recover your. This will enable you to demonstrate to HMRC that your business can meet its obligations and encourage the tax authority to approve your proposal.

What Are The Advantages Of Time To Pay Arrangements?

There are many benefits of pursuing a Time to Pay Arrangement, beyond gaining more time to pay HMRC the money you owe. These arrangements do not affect your credit rating and are completely private, so you can gain more time to pay the taxes you owe without adding any extra pressure or making your financial difficulties public.

If you are already late in paying off your tax liabilities, there can be serious consequences. These can include owing interest, receiving visits from Field Force Officers and facing demands for payment. A Time to Pay Arrangement will remove these external pressures. You can apply for and secure this type of agreement relatively quickly, which also means that you can get ahead of your business debts before they start to mount up. You will still need to pay any interest you owe on your late payments, but you will not incur any late payment charges once you have been granted the arrangement.

It is important to remember that a Time to Pay Arrangement does not reduce the total amount of tax you owe. Instead, it allows your company to pay the balance in instalments over a period of time. If you are unlikely to be able to pay your tax debt – even in instalments – there are other company rescue options that may be more effective.

The Criteria For An HMRC Time To Pay Arrangement

HMRC follows specific guidelines and principles to assess your case and decide whether to grant your business a Time to Pay Arrangement. The criteria you must meet to qualify for a payment plan are as follows:

  • HMRC needs to be satisfied that you cannot pay the tax your business owes by the due date. Time to Pay Arrangements are for companies experiencing financial problems, so if your business has the funds but aims to allocate them elsewhere, this will not be a suitable solution.
  • Your company must make a reasonable proposal in terms of what it can afford to pay over the shortest possible time period. This is where expert advice can help you to create a realistic proposal.
  • HMRC’s decision is risk-based. If there is a risk you will fail to pay based on your company’s financial situation, the tax authority may refuse the proposal or ask for further information before reaching a decision. We can help with your application and produce supporting evidence to increase the likelihood that your proposal will be accepted.
  • If your company’s financial circumstances change in any way during the period of the Time to Pay Arrangement, you must notify HMRC immediately.

Time To Pay Case Studies

Whether your tax debts are large or small, it is best to be proactive in the face of challenges. By taking action, you can avoid late payments and have the best possible chance of recovering a business that is struggling with cash flow problems.

With our support, many clients have successfully proposed Time to Pay arrangements for large amounts of tax debt, including:

  • £78,000 VAT & PAYE – Paid over 24 months
  • £62,000 VAT & PAYE – Paid over 12 months
  • £32,000 VAT – Paid over 24 months
  • £20,500 PAYE & VAT – Paid over 24 months

No matter your circumstances, it is always best to seek expert advice to learn how your business can move forward.

Negotiating Time To Pay With HMRC

If you need more time to pay your tax bill, you should take action straight away. If you wait until HMRC contacts you to chase the payment, you will reduce the likelihood of successfully negotiating a Time to Pay Arrangement and could begin to incur late payment fees and interest.

As soon as you realise that your company will be unable to make its business tax payments on time, contact us for advice. We will assess your case and determine whether you may be eligible for a Time to Pay Arrangement. Then we will contact HMRC, inform them that we are acting on your behalf and ask them to wait for our proposal before taking further action.

We can build your case for a Time To Pay Arrangement by producing reports about your company’s finances and developing cash flow projections. We can create a proposal to explain to HMRC why your business cannot pay the tax it owes, and suggest a fair and achievable payment schedule that will meet HMRC’s expectations.

For advice on whether an HMRC Time to Pay Arrangement will suit your needs, or support in preparing a proposal, contact us today. Call us on 0800 999 0666, or fill in our online enquiry form to arrange a call back at your convenience.

FAQs About HMRC Time To Pay Arrangements

How Does Negotiating Time to Pay with HMRC Work?

If a business owner realises that they may not be able to pay a tax liability on time, they should contact an expert in company rescue solutions as soon as possible. You will need to inform HMRC at the earliest opportunity, but it is always best to begin formulating a plan first, so that you can avoid the consequences that might otherwise arise. In some cases, an HMRC Time to Pay Arrangement will be the best option. These can be used for various taxes, including Income Tax, Corporation Tax, VAT, and PAYE liabilities.

When you inform HMRC, they will typically assess your ability to pay, considering factors like income, expenses, assets, debts, liabilities and the length of time over which you want to repay the debt. To secure a Time to Pay Arrangement, you will likely need to provide detailed information about your finances, including an explanation of why you are unable to pay, a proposal for how you will pay over time, and evidence of your financial position (such as bank statements or accounts). Working with an expert adviser at this stage can make it easier to gather the appropriate evidence and submit it correctly.

You will also need to make a proposal to HMRC, including details of how much you will pay back and over what period of time. It is important to strike a balance here – the proposal must be fair to HMRC, meaning that you must pay back your debt as quickly as possible, but also needs to be realistic. You also need to make sure that all filing returns are up to date and you must continue to pay your current return. There can be severe consequences for failing to meet the terms of your agreement, so you should ensure that you will be able to meet the terms of the proposal.

It is also not guaranteed that the tax authority will accept your proposal. HMRC will carefully assess your business’ circumstances, and they must be convinced that your inability to pay is genuine. They must also agree that the proposed payments are realistic within your financial means, and may negotiate if they are not comfortable with the terms you have offered.

This is another area where the team at Company Insolvency Advice can support you. By examining your business’ financial situation in detail, we can prepare a proposal that will have the best possible chance of being accepted by HMRC. This is important, because HMRC may decide to negotiate over the terms of the agreement – or in some cases, reject it and seek a different path to collecting the debt.

If HMRC agrees that a Time to Pay Arrangement is appropriate, it may negotiate terms with the taxpayer. This includes the length of time over which payments will be spread, the amount of each payment, and the total amount to be paid (including any interest). HMRC may add interest to the amount you owe if you rely on a Time to Pay Arrangement, so you may need to factor this into the proposal you make. Our expert team has a wealth of experience negotiating with HMRC on behalf of clients and we can advise you throughout this process.

At this stage, the plan will typically be agreed and implemented. It is then the responsibility of the business to comply with the terms of the arrangement and to meet its financial obligations.

What Happens if You Fail to Fulfil a Time to Pay Arrangement?

Once a Time to Pay Arrangement is implemented, the taxpayer must adhere strictly to the terms. Failure to make the agreed payments can result in the arrangement being cancelled, at which point the total amount owed is due immediately. This might also lead to enforcement actions by HMRC, which has a variety of legal mechanisms it can use to chase payment.

In the worst case scenarios, HMRC’s response may be to issue a statutory demand for payment, followed by a winding-up petition. This imposes a deadline on your business to pay the tax money you owe, and if you fail to do so, your business could be forced into liquidation. Thankfully, there are several ways to avoid this outcome, and working with an experienced adviser can help you to understand what your options are.

The most important consideration is to maintain clear communication with HMRC throughout the duration of the Time to Pay arrangement. If your financial circumstances change, you should notify HMRC, especially if this may affect the terms of the arrangement. You should also speak to your adviser about managing the situation, as there may be financing opportunities or cash flow solutions that could help you meet your obligations.

Time to Pay Arrangements with HMRC can be a lifeline for businesses facing temporary financial difficulties. It is in HMRC’s interests to grant these arrangements in cases where proposals are realistic, because this represents the easiest way to collect outstanding tax debts. If circumstances have affected your ability to pay tax bills on time, this can be a very worrying experience, but there is a way through. Working with Company Insolvency Advice can give you the reassurance you need to pursue the right solution, and give you confidence that you are making the best choice for your business. By applying our expertise and helping you to understand the possible consequences of your decisions, we can give you the best possible chance of restoring your company’s financial health.

Can HMRC Refuse a Payment Proposal?

Ultimately, it is up to HMRC whether or not it accepts a Time to Pay Arrangement, so it is important to make your proposal as attractive as possible to the tax authority. This means demonstrating that your financial circumstances have changed and affected your ability to pay your taxes, and offering a well-structured and fair plan to pay off the debt. HMRC must also believe that your business has a reasonable opportunity to return to strong financial footing if the agreement is granted. It is best to work with a company rescue expert to have the highest possible chance of the proposal being accepted.

Will HMRC Agree Time to Pay Arrangements for VAT, Corporation Tax or PAYE?

You can secure a Time to Pay Arrangement for almost any type of corporate tax liability, including VAT, Corporation Tax and PAYE. This is usually determined by your specific circumstances, including the future viability of your company and any late payment penalties you owe. Speak to an expert about your financial situation to learn whether this type of agreement will be suitable for you.

Get Help with an HMRC Time to Pay Arrangement

Speak to the team at Company Insolvency Advice today for specific guidance on securing and complying with a Time to Pay agreement with HMRC. If your business is experiencing cash flow problems and will struggle to pay its tax arrears before the payment deadline, it is crucial to get in touch with Company Insolvency Advice today. Whatever the tax repayments owed or the specifics of your company’s financial problems, we can help to develop realistic, achievable payment plans that will see your company through to the other side.

Call our business rescue experts today on 0800 999 0666 or use our online enquiry form to request a call back.

Get free, immediate help today

By submitting this form, I give Company Insolvency Advice permission to contact me. More information can be found in our privacy policy here

Business Advice Expert

Robert Cooksey

Robert Cooksey

Director Advice Line: 0800 999 0666

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