Unable to pay Tax

Can't Pay Corporation Tax.

What are my options? How will affect the company?

Contact HBG Advisory for advice.

“Living an experience, a particular fate, is accepting it fully.” — Albert Camus

Support Is Just A Call Away
Seeking support with your under performing business?We can remove all the stress while allowing you to move forward with your business removing the fog for good. Please call us on 0800 612 5448 or Book A Virtual Meeting. We help directors daily to navigate the complexities of financial difficulty.

Can’t Pay Corporation Tax – What Next?

Can’t Pay Corporation Tax – What Next? When you can’t pay corporation on time and have mounting corporation tax arrears, act quick. Then make contact with a Licensed Insolvency Practitioner for company debt advice. Once overdue, HMRC will commence debt recovery firstly with threatening letters, then followed by enforcement action if you fail to connect.

Then they will proceed with a winding-up petition. So, avoid receiving a winding-up petition, by acting fast for help.

As a director of a  company in financial difficulties and unable to pay your l Corporation Tax. It remains, therefore, crucial to ensure that you deal with the problem. It will not go away. Interest and fines will mount up, leading to a visit from an HMRC bailiff.

Usually, when unable to pay your corporation tax, you can’t pay VAT options also need to be considered..

So act now. Consult with HBG Advisory 0800 612 5448 and then please arrange an online VIRTUAL meeting today.  To deal with the problem. Various closure options exist, along with business rescue if you can’t afford to pay HMRC.

Contact the HMRC.

Once you have accepted you are unable to pay your Corporation Tax Bill on time or at all, then before the date payment is due, contact the HMRC. Ensuring you are dealing with HMRC company debt issues.

You need to speak with the Business Payment Support Service on 0300 200 3825.

If they then reject your request for help, please then contact HBG Advisory for immediate assistance. We have many years of experience dealing on matters of tax. By contacting us, it does not infer that you are entering insolvency. Indeed a big part of our briefs is to act in a purely advisory capacity.

Can you Pay Corporation Tax by Installments?

The HMRC will listen to your request. You must ensure you have your facts and figures correct ready for questions by the HMRC. Usually, they will inquire as to why your company is finding it difficult to pay the tax? Also, they will ask what effort have you made to attempt payment. Finally, ensure your company can pay if asking for instalments. Do not agree if you are unable to agree to an acceptable payment plan. Seek help immediately from HBG Advisory.

If the HMRC agree to a Time to Pay arrangement. Tax payments are then made by monthly instalments, up to usually 12 months. HMRC will agree with this when the company cannot pay now but has the ability over 12 months subject to its viability. HMRC will maintain the Time To Pay arrangement for tax liabilities if you do.

Ensure you keep to the plan on the set dates. If you fail? The HMRC will then petition to Wind Up the company.

Negotiating “Time to Pay (TTP)” with the HMRC.

Negotiate with HMRC to pay your tax bill. Though, it is wise to use an experienced firm, to act for you.
Negotiations work though if you have a viable business and have not had previous failed talks in the past.
However, if you fail to pay or agree on an arrangement, they will begin enforcement to recover the debt.

In the form of:

  • Earnings or pension directly;
  • Instruct debt collectors;
  • Apply to your bank for the money;
  • Take possession of company assets and sell them;
  • Apply to the courts for recovery;
  • Wind the business up.

As a Director, am I Personally Responsible for Corporation tax?

As a Company Director, you are a separate legal entity to your company. Therefore, directors personally are not liable for your companies liabilities (Unless you have given a personal Guarantee.) in insolvency, however, you may be liable if you traded wrongfully or fraudulently.

If involved in the knowing mismanagement of your company, as a company director, you may be personally liable then for monies owed and not rank in the normal mode of paying creditors.

So ensure you keep up to date with your company records and make every effort to pay your tax bills. Keep control of how your cash flows. If it helps change your accounting periods (Speak with your accountant for advice). Additionally, ask your accountant to produce management accounts monthly and explain them.

In conclusion, if you are a director, act responsibly.

Can I Delay my Companies Corporation Tax Payment?

During Coronavirus COVID29 Pandemic. HMRC appear to be allowing a level of empathy helping small companies struggling.

As always with HMRC. When dealing with them, you should speak honestly and openly. The HMRC will help if advised. The earlier you approach and open dialogue the better the response.

Insolvency – When you can’t pay Corporation Tax?

Insolvency support.

In the event, your company is unable to pay its Corporation tax and you have exhausted or your available options with the HMRC.

Then explore ways to clear HMRC debt?

Then it is time to sit down and look at your available options with a Licensed Insolvency Practitioner. Often referred to as an insolvency advisor.

At this point, directors need to be realistic and accept your company is insolvent.

Failing to pay HMRC and not seeking help

Failing to pay Corporation Tax will prompt HMRC to commence a very well practised process for collection of the tax, So failing to pay means: 

  • HMRC first issues an initial letter to highlight that the tax remains unpaid;
  • Failing to respond, then may trigger a bailiff attending on behalf of the HMRC.
  • If you then fail to pay the debt or have no assets to remove, then a statutory demand may be issued giving 21 days to pay.
  • HMRC then file the winding-up petition at the Court, the Court will then advise you in writing of a hearing date giving fourteen days notice.
  • The date and issuing of the winding-up petition then are advertised in the Gazette allowing company creditors, and the world at large to see the order. Additionally companies bank will pick up the notice.
  • Then your company bankers will freeze all transactions with your accounts fourteen days before your court presentation.
  • It is usual to arrange a Barrister to attend on your behalf, via a solicitor if disputed to request for an adjournment so to gain additional time to prepare a defence. An expensive point to be at, though and considered risky.
  • Failing which, your company faces Compulsory Liquidation.

Insolvency options for distressed companies

Suppose your company is financially distressed and unable at present to deal with its corporation tax liability along with other creditors. Then if your company is beyond rescue, consider closing the company formally with an insolvency procedure. Perhaps you may need advice on what an Insolvent Liquidation is and talk through the process in understandable terminology.

CVAs and Corporation tax

Will I lose out on tax if I take out a CVA? 

Proposing a Company Voluntary Arrangement CVA remains a job that needs serious input to secure approval from your company creditors.

A company proposing taking out a CVA has accumulated tax trade losses. The continued accessibility of losses in future periods remains a crucial part of the CVA’s successful execution. 

Assuming that the Company continues to trade throughout the CVA process, its undiminished trading losses remain transferable to future profits from the same trade. 

As the HMRC are often a major creditor. When a company enters insolvency, then why is the HMRC the biggest creditor?

HBG Advisory licensed Insolvency Practitioners will help you explore the available options to you. Ensuring resolution your companies corporation tax commencing as soon as you make contact. STOP THE PRESSURE TODAY! 

So please contact John on;

  • Freephone 0800 612 5448. Available 8 am to 8 pm seven days a week.
  • Book a VIRTUAL meeting safe and Private. The privacy of your own home or workplace
  • Use the webchat at the foot of the web page on the right.

The Team at HBG Advisory

Support Is Just A Call Away
Seeking support with your under performing business?We can remove all the stress while allowing you to move forward with your business removing the fog for good. Please call us on 0800 612 5448 or Book A Virtual Meeting. We help directors daily to navigate the complexities of financial difficulty.
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