Clear HMRC Debt – HM Revenue Debt Collection

Clear HMRC Debt Written by John A Waller, Director. Reviewed June 20th,2024.

Unable to clear HMRC debt?- HMRC Arrears

Are you suffering from financial distress?

HMRC Debt Collection Pressure?

You or your business get a final opportunity letter from Debt Management and Banking at HMRC. If you have ignored the letter, await a visit from a debt collector on behalf of HMRC. (Listed below)

Is it the direct result of the Coronavirus COVID-19 pandemic? If so, contact HBG Advisory for company debt advice or arrange a Time to Pay agreement with the HMRC.

The support package, stated in the March 2020 budget, confirmed that the existing HMRC Time to Pay scheme continues to allow companies to manage their ongoing tax affairs.

UK’s businesses expect to be negatively affected financially by the pandemic. Many companies suffer from extreme pressures on cash flow. Eventually, businesses fall into arrears with creditors.

However, during the challenge of the coronavirus COVID-19 pandemic, UK businesses have been able to help.

CBILS promotes lending to viable UK businesses that have been refused a loan due to weak security. For further detailed help, read Enterprise Finance Guarantee.

Business owners need to ensure their company faces financial and operational difficulties. If your business remains threatened by the pandemic, contact HBG Advisory today to arrange a free, confidential, virtual online meeting.

Telephone 0808 280 3581.

If you cannot pay your taxes when they are due, can you negotiate with HMRC for a time-to-pay arrangement? Since the post-COVID-19 pandemic, HMRevenue & Customs has widened its access to its time-to-pay scheme.

If you cannot pay your tax bill in full

Then, contact HMRC to discuss the support available to you.

HMRC may recommend you pay in instalments. This is called a Time to Pay arrangement.

Contents hide

1 How Does HMRC Collect Its Debts?

2 Debt collection: confirm the identity of HMRC staff with HMRC

3 Contacting HMRC About my Companies Tax.

4 Dealing with HMRC Debt Collectors? (Bailiffs)

5 Received an HMRC Notice of Enforcement?

6 HMRC Debt Collectors Appear?

7 Your Rights?

8. Enforcement Officers Take Personal Items?

9 Clear HMRC Debt – Time allowed on an HMRC Time To Pay?

10 Can the HMRC break the agreement?

11 Clear HMRC Debt – Options if the HMRC Don’t Allow A TTP Agreement?

12 Can’t Pay Vat – Unable to Pay VAT Due to Coronavirus Covid19?

13 Getting help with VAT arrears?

14 VAT arrears?

15 What happens if your company has VAT and PAYE arrears?

16 Options available to Directors? To avoid personal liability.

17 Types of Insolvency – Insolvency Options

18 Debt Management Plans (DMP)

19 Changes to UK insolvency law come into force

19.1 Further Reading

HMRC debt collection process

HMRC Debt Collectors

Paying HMRC Debt Collectors – Payment Plan

The HMRC always seeks to collect tax when due. However, in the event of late payment, they have contracted with independent commercial debt collection agencies (DCAs) to act on their behalf to obtain tax debts overdue. You may qualify for a payment plan if you act quickly and are open with the collectors.

Your Rights on how to clear HMRC debt?

Understanding what the HMRC debt collectors legally carry out and remove is important. An HMRC enforcement officer or bailiff may have visited your premises. They both have similar powers. They may force entry only into commercial premises, but the courts must sanction them to carry out such actions.

Upon entry, HMRC debt collectors may seize goods to repay the debt and the cost of their action. The goods then are sold at auction, but it is important to note that they are usually sold below their resale value.

Before any removal, they usually attend your commercial premises, listing those items they shall remove for auction. These items are protected under a Controlled Goods Agreement. Once you have signed the agreement, you can repay the debt within seven days, failing which the goods will be uplifted. Please note that goods held under this agreement no longer belong to you, and you must not sell them, as that would be committing a criminal offence.

For further detailed reading, please view dealing with HMRC company debt.

HMRC Debt Recovery & Collection

HMRC collects taxes on our behalf to pay for the services we use and require.

The process of collecting taxes begins with a tax demand for those who have either failed to pay or refused to pay.

However, if that process receives no action or response, HMRC instructs outsourced debt collectors. HMRC remain required to advise you they have delegated collection.

So if you receive a Final Opportunity Letter and either have not paid or failed to contact HMRC, a notification of debt enforcement letter (giving you 14 days to pay) will follow. Therefore, you should ensure that you have not actioned the first letter and that a second will follow to your company’s registered company address. Failure to act will, therefore, trigger a DCA (Debt Collection Agency) to establish direct contact with you as an officer of the company. 

The HMRCdevt collection agencies currently use outsourced debt collectors, including:

  • Advantis Credit Ltd;
  • Apex Credit Management Ltd;
  • Bluestone Credit Management Ltd;
  • CCS Collect (also known as Commercial Collection Services Ltd);
    • CCSCollect
      Norfolk House
      Wellesley Road
      Croydon
      Surrey
      CR0 1GR
  • Drydens Fairfax Solicitors;
  • Moorcroft;
  • Past Due Credit Solutions (PDCS);
  • Resolvecall Ltd;
  • Rossendales Ltd;
  • Walker Love.

Are there Time Limits on HMRC’s Capacity to Collect Debts?

No time constraints on HMRC’s capacity to collect tax debts. Indeed, the debt may be transferred from generation to generation in some severe cases. Time limits fluctuate from circumstance to circumstance. For example, councils can collect business rates for up to 20 years. VAT & income tax, though, have no time limitations.


Support Is Just A Call Away
Business recovery for distressed directors and limited companies. Free advice from approachable team of advisors.Tel: 0800 612 5448

Clear HMRC DEbt = Court Action Pending From HMRC

When HMRC threatens court action. Then, it is essential to deal with the matter thoroughly. For assistance to ensure that you receive the best possible chance.

Contact HBG Advisory on 0808 280 3581.

Contacting HMRC About Tax.

For assistance contacting the HMRC and the correct department, please read our page HMRC Offices Around The UK.

HMRC Business Debt Line0300 200 3887.

Debt collection: confirm the identity of HMRC staff with HMRC

Please then carry out the following:

  • Ask to see the collector’s photo ID;
  • Make a note of the ID number on the photo ID;
  • Call this phone number.0300 200 3862;
  • Give HMRC the ID number;
  • HMRC will confirm the collector is genuine.

Contacting HMRC About my Companies Tax.

The HMRC covers many tax departments. Therefore, understanding who to contact is essential. HMRC tax debt problem needs to be dealt with. Our webpage, HMRC OFFICES UK, details the prime contact points as well as opening times, which saves time. Once you get to the correct department, ensure you note everything said and what actions are required.

Further help can be found on HM Revenue Customs/Contact.

Dealing with HMRC Debt Collectors? (Bailiffs)

The HMRC collects the tax. However, if you cannot pay them, inform the HMRC and do not avoid them. Contact remains essential. A Time-to-pay arrangement may be arranged, provided you keep in contact once you receive your tax demand. Further delay may cause HMRC to refuse to offer a rearrangement. Therefore, proceed to enforce recovery of the debt.

HMRC instructs enforcement officers to attend your premises to collect the debt if payment is not made. Therefore, it may have fatal consequences for your company’s ongoing viability. Act Fast!

Failure to clear HMRC, therefore, attracts interest and penalties.

Received an HMRC Notice of Enforcement?

IMPORTANT that you understand your rights. If you respond quickly, your opportunity to sort a Time to Pay may still be available when receiving an HMRC enforcement notice.

If you fail to respond and do not clear the outstanding debt, then agents attend your premises within fourteen days.

HMRC DEBT Management.

HMRC Debt Management helpline is 0300 200 3887.

The opening times are 8 am to 8 pm, Monday to Friday.

HMRC operates Agent Dedicated Lines, which allow you to discuss self-assessment, PAYE, and Tax Credit anomalies.

HMRC VAT payment online.

VAT Payments online are possible by telephone banking, direct debit, BACS, or standing order. Additionally, you may pay by a debit or credit card, CHAPS, or pay your VAT liability at a bank or building society.

The details are:

Sort code. Account number. Account name

08 32 00 11963155 HMRC VAT

HMRC Debt Collectors Appear?

Once HMRC debt collectors attend, they secure goods available under a Controlled Goods Agreement for seizure and sell them at public auction due to the outstanding debt. NOTE: You may still offer full payment plus agent attendance costs. If possible, do not allow the position to escalate.

So, when you can’t pay VAT, check out your options with the team at HBG Advisory.

Your Rights?

Enforcement officers and bailiffs can force entry into commercial premises. However, the Court requires authority.

Understand bailiff’s powers with a ltd company.

Upon entry, HMRC debt collectors seize goods to cover the debt (including costs). All goods are sold at public auction. Your perceived value may not equate to that raised at the auction.

Before removal, the enforcement officer completes a “Controlled Goods Agreement”. Therefore, you must sign the agreement and have seven additional days to clear the debt, including enforcement costs. Failure to sign means the officer may immediately remove the goods. NOTE: Signing the agreement means you may not sell any of the goods listed.

May Enforcement Officers Take Personal Items?

No.

Encountering cash flow issues, paying HMRC is usually the first thing company directors stop paying. The HMRC remains the most common business creditor, and insolvent companies usually owe them debt. Paying taxes late can alert the HMRC that your business is potentially in financial crisis and potentially insolvent. Therefore, you must act quickly. Contact HBG Advisory now for support and direction from Licensed Insolvency Practitioners.

Subject to your company’s financial position, you may negotiate and agree to extra time to pay the debt off while paying your regular payment. Known as a Time to Pay arrangement with HMRC.

Clear HMRC Debt—Is there a time limit for an HMRC time to pay? Can I pay my VAT bill in instalments?

If you consider negotiating a Time To Pay agreement, the HMRC assesses the viability of your company. They recognise that well-run businesses can undergo cash flow problems. They are usually prepared to listen to you if your businesses face genuine financial difficulties, and the directors have done everything to date to ensure tax payments are paid. You should:

Note. A time-to-pay agreement is for a specified period. Each agreement requires assessing its values, so the time agreed may deviate from business to business. A TTP agreement for over a year is not the norm, but it is achievable. Company directors should explore other insolvency recovery options if a more extended instalment plan is needed. Remember, a TTP does not help all companies move forward. Remember to consider all creditor pressures, along with market trends. Therefore, consult HBG Advisory for help.

Can the HMRC break the agreement?

Once a formal agreement has been finalised, the HMRC must, by law, keep to the arrangements unless an exceptional incident happens. Usually, changes in your business’s financial situation may mean it no longer supports the agreed TTP plan; then, they have the right to withdraw. Honesty is crucial. If HMRC finds your application fraudulent, they can terminate the agreement. If you default on paying, they can terminate the agreement. Remember, if your financial situation worsens, they reassess their risk, and the potential of the debt rises again. Please note that a Time to Pay agreement assists distressed companies in short-term situations and does not support insolvent companies. If a creditor is wounding up your business, the outstanding TTP agreement becomes void.

Clear HMRC Debt – Options if the HMRC Don’t Allow A TTP Agreement?

How, then, do you clear HMRC debt? Not having additional time to pay off your business tax liabilities causes further problems for the company and its directors.

Common reasons include the rationale for a TTP proposal being rejected. Usually, companies are refused because HMRC doubts the company’s ability to pay the whole debt in an acceptable time frame.

If rejected for a TTP arrangement, further options exist. Business rescue and recovery options may offer better outcomes for your business. You are looking for additional funding. However, consider if you have other pressing creditors in addition to HMRC. The company may then need to find a formal restructuring process as a Company Voluntary Arrangement CVA explained.

Help from HBG Advisory to clear HMRC debt.

Whatever you do, do not give up. HBG Advisory, an experienced team of licensed insolvency practitioners, can offer you a free initial consultation in total confidence. We can explore the various options available to you and your business. If you are struggling with cash flow issues related to HMRC and other debts, contact HBG Advisory now and take a positive step. Get your business on an assured financial path forward and relieve stressful pressures on you and your team. Footing.

Getting help with VAT & Tax Arrears?

HMRC is usually a creditor in cases of insolvency. When a company experiences low cash flow, it often delays or ceases payment to HMRC for VAT, followed by NIC.

Ignoring your fiduciary duty to pay VAT as and when it falls due can have profound implications for you as an officer of the company and the company itself.

Please read Can’t pay VAT! What happens next?

VAT arrears?

VAT (Value Added Tax) collected by traders is an indirect tax paid to the UK Government.

As a former member of the EU, though still partly unclear of their control, the VAT rate may not fall below 15%. Currently, the standard in the UK remains 20%. Still, with our exit from the EU and the Coronavirus COVID-19 pandemic, the central government is considering changes to help reflate the UK economy.

Start charging VAT (Output Tax) and reclaiming it (Input Tax). Your company turnover, therefore, must be £85,000. (net)

So, if your company has some form of insolvency proceedings, HMRC can list it as an unsecured creditor.

What happens if your company has VAT and PAYE arrears?

Seek professional insolvency advice as quickly as possible once you realise your arrears.

Take action immediately as proof that you act as a responsible company director. You may be personally liable for your company’s debts if you have proven you acted not in your company’s creditors’ interests or even wrongful or fraudulent trading.

HMRC focus

HMRC’s focus is a tax collection process. For instance, late payment is an issue, and as an officer of the company, you must treat this problem carefully and remember your liability if you ignore HMRC.

HMRC options include a winding-up petition to dissolve your limited company and to commence compulsory liquidation with the official receiver appointed.

Can I pay my VAT by cheque?

Use the paying-in slips provided by HMRC to pay your VAT at your bank or building society by cheque. Cheques should be payable to ‘HM Revenue and Customs only’, adding your 9-digit VAT registration number. This can be found in your VAT online account.

Clear HMRC Debt – Options available to Company Directors? To avoid personal liability:-

  • Pay debts due to HMRC;
  • Refinance company assets;
  • Raise emergency credit;
  • Invoice factoring;
  • Raise finance from company director loans;
  • Request a Time to Pay arrangement with HMRC.

Types of Insolvency – Insolvency Options

  • Company Voluntary Arrangement (CVA);
  • Protect the company with a company administration;
  • And if you wish to cease trading and close?
  • Creditors Voluntary Liquidation

Debt Management Plans (DMP)

A DMP is an agreement between you (personally) and your creditors when you financially may not pay your debt. It enables you to repay a smaller amount monthly. However, you still have to repay all the original debt over a longer time. This debt arrangement scheme helps pay your tax bill, deal with tax arrears personally, and avoid increasing tax debt and bankruptcy. For further assistance with a DMP, contact Citizens Advice. Tax aid may give other help and other debt charity sites when you can’t afford to pay HMRC.

Clear HMRC Debt – Changes to UK insolvency law come into force

The Corporate Insolvency and Governance Act received Royal Assent, valid June 26th, 2020.

The Act then gives interim relief until September 30th 2020 for companies receiving a winding-up petition, wrongful trading. However, this will be extended if the pandemic continues and if a company shows its troubles as a result of the COVID-19 pandemic. For more up-to-date news, view the Corporate Insolvency and Governance Act 2020.

Since June 26th of this year, changes in insolvency law in the UK have been in place to protect companies from insolvency. The HMRC suspends financial penalties.

However, county courts have reopened following government health guidelines.

Aspects of insolvency rules have changed to help companies deal with creditors. The HMRC is one.

As an officer, consult an insolvency practitioner if your company is experiencing cash flow issues.

Ask yourself, is your company insolvent?

If yes, you can appoint an IP and register an intention to appoint an administrator.

In conclusion, however, tax is like death. It exists and then never goes away. Above all, talking helps action, though the answer is also. So, therefore, deal with it.

Personal Tax Debt Advice.

For advice on tax debt personally. Contact John Waller on 0808 280 3581, who will pass you over to our sister company, who are qualified to discuss matters with you. For further reading, check out The Money Advice Service, who help with personal debt, and have further information about managing debt and offers where to go for free debt advice.

Take the next move with HBG Advisory:

  • Please contact a team member on 0808 280 3581 and ask to speak to an expert in corporate insolvency.
  • We then may discuss the company’s position, including current trading, cash flow, assets, liabilities, creditor action, and your employees, in clear, understandable terms.
  • The HBG Advisory will organise a confidential meeting to take suitable actions to safeguard the company and its position.
  • We will work out the best way forward by considering all the issues.
  • You remain guided by Licensed Insolvency Specialists who act as court officers and committed professionals in the UK.
  • If you prefer general guidance (In Privacy), please sign up for our newsletter by completing the contact form. We will send you valuable information and advice on available insolvency and finance possibilities without speaking to anyone until you are ready.

Support Is Just A Call Away
Business recovery for distressed directors and limited companies. Free advice from approachable team of advisors.Tel: 0800 612 5448

Book a Virtual Meeting - Free Confidential Advice
If you need help understanding the best way forward for your company, we can provide confidential free initial advice. You can book a free virtual meeting or call us on 0800 612 5448..
Acca Logo
IPA Logo
TMA Logo
R3 Logo
Can't pay VAT? Instant help available.
FREE Meeting for Company Directors
Help with PAYE, VAT & HMRC Tax Debts

    Get Help Today

    1. Name: (*)

    2. Company Name:

    3. Telephone: (*)

    4. Email:

    5. Message:

    *Required Fields

    CALL TODAY FOR
    EXPERT CONFIDENTIAL ADVICE

    0330 056 3120

    Further Reading