So, let’s pretend for a second that your business has recently run into some problems with HMRC. You owe a large amount of debt to the government as part of normal business operations, and you’re struggling to pay it back. This is not a problem. It might seem like a big deal, but you need to take a breath, relax, and trust us when we say, this is not impossible to fix.
The thing about managing HMRC debt is that you need to have a clear plan and some strategies in place. It’s not impossible to do, but you do need to know what you’re doing. To try and make sure that you have the best help, we’re going to look at some of the ways that you can identify how to manage this debt.
Work Out a Payment Plan
So, the first thing that you are going to want to do in any situation where dent is involved is to work out a payment plan. The payment plan is an important part of tackling a situation proactively, because it means that you start paying off the debt immediately. The repayment plan that you work out will be between you and HMRC. It may be spread out over a period of years or months depending on the situation.
The repayment plan is an important step to getting back on an even financial keel. Essentially, you are going to have to pay the debt off in one form or another, which is why a repayment plan is often the best way to do things. You pay a small amount each month, and when it’s done, that’s the end of it.
Identify the Problem
It’s not difficult to understand that debt is a problem.
Somehow, something has gone wrong within your business, and the result is that you now owe money to HMRC. It might be that you had a bad season, or that you were affected by the COVID-19 pandemic, or simply just poor spending. However, there is a clear problem, and it’s important to understand what that problem is.
As a business, you need to sit down and try to work out why it is that you have fallen into debt. This might mean that you need to take a look at your finances from the beginning, and examine all of your outgoings, expenses, and spending habits. The only way that people escape the cycle of debt is to be honest with themselves about why the debt is occurring. It can definitely be a difficult process, but it is important.
Explore Financial Aid
Financial aid might seem like a bit of a laughable suggestion, but there are things that you can do in some situations to help with HMRC debt without getting yourself into even more trouble. However, there are a few ground rules if you’re going to go and seek out any kind of financial aid at all.
First of all, short-term loans are not an option.
These loans will have incredibly high interest rates, and you can very quickly find that you spiral further into debt trying to pay back the loan that you are using to sort your debt out. It is the equivalent of taking one piece of a boat to fix the hole. You still have a hole in the ship, so you need to find a way of repairing the hole without taking it from somewhere else.
With that being said, there are options that you can consider. For example, some people choose to go and seek an investor. You may not have assets that you can offer, but an angel investor would give you a certain amount of money in exchange for a certain percentage of the company. This is not the worst deal in the world, because it gives you financial breathing room and at the same time, you are simply offering partnership in your venture.
Obviously, no matter what situation you do consider, you need to make sure that you have carefully thought it through. Making a financial decision because you are panicked is not a good idea.
Seek Advice
Obviously, these are just broad suggestions on what to do for the best. If you want specific advice, then you do need to speak to an expert.
At the end of the day, that’s why we’re here. We will always be more than happy to give advice to people, and in a lot of cases, it’s necessary. People need the support of an expert to help them work out what to do for the best. Your business is a big deal, you may not know what decision is best for it right now, which is why you consult with professionals who will.
Final Thoughts
So, managing debt with HMRC is a difficult thing. There are quite a few considerations, and this makes it difficult. There are plenty of different choices to explore, and making the right decisions when it comes to that is difficult. Nobody is denying that being in debt is a very stressful situation, and when people are stressed, they don’t make the best choices.
With that being said, there are things that you can do to try and manage your debt with HMRC, and put it all together in a very powerful way. You’ve got a lot of options, and that makes it easy for you to pick and choose the best ones. It’s important to take a look at getting the right aid, and identifying where the problem has begun. You can’t fix a problem until you know what it is.
It’s important to try and remain calm when dealing with HMRC. There are a lot of different things to consider, so making the right decisions is very important. At the end of the day, it’s all about the choices that you make, and the way that you approach a situation that will determine how you solve it.
