If your company or your client’s company finds itself in financial difficulties, one of the most important creditors you need to consider is HMRC.

Although HMRC doesn’t have any more power than other creditors, it does have the necessary systems in place to spot late payers and recover outstanding arrears… quickly.

In an ideal world you would pay your VAT, PAYE and Corporation taxes on time. However unforeseen circumstances, such as the loss of a major customer may
tempt/push you into prioritising trade suppliers, wages and/or rent over HMRC to keep your business on track.

You can see how easy it is to fall into tax arrears. Yet as HMRC is always keen to make you aware, falling behind with your tax payments can lead to financial penalties, legal action and even insolvency.

If your company or one of your clients’ companies does find it is falling into tax arrears, know that HMRC can be sympathetic and take a commercial view, if approached in the right way.

Definition of a HMRC Time to Pay Arrangement

Time to Pay Arrangements came into being as a result of a 2008 Government initiative to combat the effects of the recession.

HMRC will consider a Time to Pay Arrangement according to the ability of a company to pay back its arrears, over a suitable period, usually between 6 and 12 months.

How to obtain a HMRC Time to Pay Arrangement

As you will need to present a strong case to HMRC, we recommend you seek professional help and advice in setting up a realistic Time to Pay Agreement from an experienced firm of insolvency practitioners, such as BM Advisory.

You will be assisted with:

1: Presenting your case to HMRC by way of a proposal. It will detail:

  • The cost of your financial liabilities.
  • Your cash flow projections.
  • A realistic repayment plan.

Your Time to Pay Agreement proposal will make it clear to HMRC that you have thought carefully about how you intend to effectively rescue your business by:

• Improving your cashflow.
• Spreading out your arrears over a period of time.

2. Negotiating your Time to Pay Agreement HMRC

• Your qualified insolvency practitioner is best placed to explain why it is in HMRC’s best interests to accept your proposed payment plan.

HMRC Time to Pay Arrangement Case Studies

In the last few months the team at BM Advisory has successfully negotiated a number of time-to-pay agreements with HMRC. Examples include:

South East Vehicle Lease Business

Found itself in arrears due to a long-standing fault on its account. BM Advisory negotiated a £250k time to pay agreement with HMRC over 3 months. As a result over 50 jobs were saved.

South East Construction Contractor

Found itself struggling due to its bookkeeper becoming ill. BM Advisory negotiated a £300k time to pay agreement with HMRC over 4 months.

Here, not only did the HMRC Time to Pay Arrangement save the firm and a large number of jobs, it also enabled the firm to go on to secure framework contractor status with its major blue chip customer.

Know that in both cases success was achieved due to swift action being taken and a realistic business case being presented to HMRC.

If you or your clients are struggling with HMRC debt, we strongly advise you act now. Contact our specialist HMRC Time to Pay Agreement team today.