TIME TO PAY ARRANGEMENTS

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Company Insolvency Advice is well versed with assisting company directors across all industry sectors – Get the help and support you need by contacting us on either 0800 999 0666 or alternatively via email or schedule a meeting through our contact us page.

WHAT IS A TIME TO PAY ARRANGEMENT?

If your company has fallen behind with its VAT, PAYE, CIS tax or corporation tax, or if it looks like cash flow issues will make it difficult for your company to meet its tax obligations, then we may be able to help you by negotiating extra time to pay with HMRC. A Time to Pay Arrangement is an agreement that can be negotiated with HMRC if your business is falling behind with its tax payments. A Time To Pay Arrangement gives your company extra time to make these tax payments, so that you can pay your tax bill via monthly instalments over an agreed period of time.

As experienced insolvency advisors, we can assess your case, devise a persuasive and realistic argument for your company to be granted a Time To Pay Arrangement and negotiate with HMRC to reach an agreement on a Time To Pay Arrangement for your business.

“Her Majesty’s Revenue & Customs (HMRC) is the most common business creditor. We find that the majority of companies will owe some form of debt to HMRC.”

WHY MIGHT A TIME TO PAY ARRANGEMENT BE NECESSARY?

Business tax payments, such as VAT and PAYE, are often one of the first things that companies fall behind on when their business is experiencing cash flow problems.

It is in the interests of HMRC to grant Time To Pay Arrangements to companies that are going through cash flow difficulties but are ultimately still viable businesses. They can claim much more tax revenue from a company in the future by granting it more time to pay and allowing it recover from its cash flow issues, than if they were simply to force the company into liquidation or administration.

Despite this, HMRC will not simply grant any company a Time To Pay Arrangement. They must be confident that your company will be able to keep to the agreement. This is where we can help. We can assess your company’s situation and advise you on whether your company could be eligible for a Time To Pay Arrangement. We will then work with you to build a rock solid case for a Time To Pay Arrangement for your business. Then we will then present your case to HMRC and negotiate on your behalf to come to an agreement.

  • If your company is struggling to keep up to date with its tax obligations, you should not keep HMRC waiting, as they are quick to spot late payers. Be proactive and call us now to discuss the options on 0800 999 0666.

ADVANTAGES OF TIME TO PAY

 

  • Not a formal insolvency procedure.
  • Does mot affect your credit rating.
  • Completely private – not advertised anywhere.
  • A relatively short timeframe solution.
  • No more visits from Field Force Officers.

THE CRITERIA FOR A TIME TO PAY ARRANGEMENT

It is important to remember that a Time To Pay Arrangement does not reduce the total amount of tax owed, it simply allows your company to pay the balance in instalments over a period of time. When deciding on whether to allow your company a Time To Pay Arrangement, HMRC will follow certain guidelines and principles to assess your case:

  • HMRC needs to be satisfied that your company does not have the ability to meet the tax due date. Time To Pay Arrangements are for companies experiencing financial problems, not for companies simply wishing to use the money elsewhere. Your company needs to be willing to pay, just unable to do so presently.
  • Your company must make a reasonable proposal in terms of what it can afford to pay over a specific time period.
  • The instalments must be paid over the shortest time period reasonably possible.
  • If your company’s financial circumstances change in any way during the period of the Time To Pay Arrangement, for better or worse, you must notify HMRC immediately.
  • HMRC’s decision is ‘risk based’ so if they perceive your company to present a greater amount of risk, they may require further information before reaching a decision or simply refuse the proposal outright – we can help you with this.

Securing a Time To Pay Arrangement will ensure that you do not face the late payment penalties that HMRC can impose on companies that do not pay their business taxes on time. However, you will be charged interest on the amount of tax still outstanding.

 TIME TO PAY CASE STUDIES

 

  •  £78,000 VAT & PAYE – Paid over 12 months
  • £62,000 VAT & PAYE – Paid over 6 months
  • £32,000 VAT – Paid over 12 months
  • £20,500 PAYE & VAT – Paid over 12 months

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 to be contacted by HMRC chasing payment, the likelihood of them approving a Time To Pay Arrangement is reduced.

So as soon as you realise that your company may struggle to make its business tax payments on time, you should contact us ASAP 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 and inform them that we are acting on your behalf, and that they should wait for our proposal before taking further action.

We will construct your case for a Time To Pay Arrangement by looking into your company’s financial situation and producing reports and cash flow projections. We will put forward your case and deal directly with HMRC on your behalf. We will explain to HMRC why your company is unable to pay the tax owed, and detail how much your company is able to offer in monthly payments.

HMRC will not agree to any Time to Pay Arrangement unless they are satisfied that your company will be able to keep up with the payments. With our years of experience in dealing with HMRC and negotiating Time To Pay Arrangements on behalf of our clients, we are able to construct solid cases for Time To Pay Arrangements that have the greatest chance of being approved.

HOW MUCH ‘TIME TO PAY’ WILL HMRC GIVE?

HMRC want to give businesses every opportunity to succeed and they understand that even well-run businesses can experience cash flow problems. HMRC are willing to negotiate and allow extra time to pay for companies that have done their best to keep up to date with their tax affairs but are now in genuine financial difficulty.

Every individual case for a Time to Pay Arrangement is judged on its own merits, so the length of time given in a Time To Pay Arrangement varies from company to company.

HMRC will decide how much extra time your company is given to pay its tax debts based on the strength of your company’s case, your company’s current financial circumstances, its prospects for recovery, its previous history of tax payment, and the risk that HMRC feels that your company represents.

The amount of time given to pay tax debts in a Time To Pay Arrangement is usually around 3-12 months. A Time To Pay Arrangement lasting more than one year is rare however due to Covid-19 we have seen more forgiveness from HMRC with the amount of time increasing.

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