Arranging a time to pay with HMRC

Arranging a Time to Pay with HMRC

Arranging a time to pay with HMRC. Written by John A Waller. Consultant. Reviewed June 6th,2024.

Negotiating a time to pay with HMRC, especially during the current pandemic, can be crucial to your business’s survival.

Understanding what business recovery means when dealing with company debt and receiving robust business debt advice is essential.

Your company may be viable but suffered a bad debt affecting cashflow therefore requiring a time to pay with HMRC when you can’t pay VAT  or other taxes.

Will HMRC allow a Time To Pay if I have defaulted on my Bounce Back Loan repayment?

Usually no.

It would be best if you were upfront on day one of your requests, advising HMRC of any arrears rather than them finding out.

Do not delay with dealing with HMRC debt.

HMRC Time to Pay helpline:

0300 200 3822

You must arrange to pay your tax bill with HMRC if you either:

  • Have missed a payment or
  • Know you cannot pay on time.

However, if your limited company cannot pay your taxes as due, you may consider contacting HMRC to agree on a time to pay your outstanding tax. A Time to Pay arrangement is a repayment plan that allows you to pay taxes over a set period in arrears. Agreed by HMRC with you for yourself or your limited company.

Defaulting payment of Time to Pay?

However, you must keep your agreed payments and other taxes. Failure to do so will then prompt HMRC to cancel the arrangement and commence legal action immediately to recover the outstanding amount.

If you cannot pay due to the Coronavirus (COVID-19) pandemic,

Before contacting HMRC, be prepared:

You’ll need to therefore know:

  • Your reference number (for example, your 10-digit Unique Taxpayer Reference or VAT reference number);
  • The amount of the tax bill you’re however finding difficult to pay, and the reasons why;
  • What you’ve done to try to get the money to pay the bill;
  • How much you can pay immediately, and how long you may therefore need to pay the rest;
  • Your bank account details.

Which HMRC debts to then prioritise: 

HMRC is more inclined to consider agreeing to pay for profits based taxes, like:

  • Income tax and 
  • Corporation tax.

Then for taxes, including: 

  • VAT and 
  • Employees’ PAYE and national insurance contributions.

Usually, best to prioritise paying VAT and employer liabilities. However, an updated direction awaited.

Arranging a Time to Pay with HMRC and late payment penalties 

A payment time advantage is that HMRC won’t charge late fees if the trigger date is met. However, it remains unclear whether HMRC will be more prepared to forgo penalties for late payment during the current Coronavirus pandemic, although the helpline page indicates HMRC will investigate the cancellation of penalties.

Arranging a Time to Pay with HMRC, and what happens when you contact HMRC?

HMRC Time to Pay helpline – 0300 200 3822

The will, however, ask you about the following:

Your income and expenditure;

  • Details of assets;
  • What are you doing to update your tax payments?

HMRC will decide whether you should pay immediately. However, if you cannot, they’ll determine if you’ll get your payments back on track with more time.

You’ll be asked more in-depth questions if you’ve been given more time to pay before. In more complex cases, HMRC may require evidence before they make a decision.

Arranging a Time to Pay with HMRC agreements requires future tax liabilities to be paid as they fall due. Where, however, this is impossible. It is then necessary to contact HMRC again to renegotiate the arrangement to include the new debt. HMRC is often disinclined to agree to repeated appeals for time to pay, but during the Coronavirus COVID-19 pandemic may be more receptive to a further arrangement.

Arranging a Time to Pay with HMRC and being refused?

Can’t pay VAT options

Company can’t pay PAYE To HMRC

What does business recovery mean?

Tax Avoidance Schemes and penalties.

Help from HMRC

You may seek further help on arranging a time to pay with HMRC by contacting HMRC.

How HBG Advisory can help

Applying for a time to pay with HMRC requires accurate proposals. The team at HBG Advisory can talk you through the negotiations and support you through the process.

Importantly, if you fail to agree an arrangement with HMRC, then look at your option if unable to repay your bounce back loan.

To schedule an initial free meeting in confidence with a member of our restructuring team, please call 0330 056 3120.

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