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Can't Pay PAYE to HMRC

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Company Can’t Pay PAYE To HMRC? 

For a business to commence entering arrears of tax with HMRC and can’t pay PAYE either. Therefore, considered a serious problem, requiring immediate attention. If the arrears are PAYE, then HMRC will assess your company’s previous performance and whether they believe your intent to pay. If this is the first time, you’re having difficulty paying PAYE? Then HMRC will react (differently) from a company that has missed payments often.

HBG Advisory can help you.

If you have any concerns or further questions? Please call HBG Advisory on 0800 612 5448 for confidential, free advice and robust support regarding your present financial predicament. HBG Advisory and its team have helped many distressed directors and businesses navigate their way through insolvency.

Consequences when your company can’t pay PAYE to HMRC?

Remaining unable to pay HMRC due to insufficient money requires careful handling.

The HMRC has a finely tuned system for collecting tax. To start, they will write to you requesting payment generated by their new computer system. It would help if you took note of their request. The letter details the way to pay.

Suppose you fail to pay or contact them. Then penalties will start.

Therefore, you need to act quickly, as the system is robust, and stronger threatening letters will follow, moving forward to legal action for recovery.

Finally, HMRC remains authorised to commence a winding-up petition to achieve a compulsory liquidation. Therefore, always respond to any correspondence and keep talking.

So please act. Do not ignore letters. Things will only get worse. 

Are PAYE arears pulling your company down? If so, seek advice from a licensed Insolvency Practitioner.

Ensure you maintain contact with the Business Payment Support Service at the HMRC.

If you have not experienced any form of late payment with HMRC in the past? Then approach the HMRC Business Payment Support Service (BPSS). 

However, if you have experienced previous issues, ensure you talk with the office contacted, as detailed in the top right-hand corner of the letter received. The option to contact the BPSS remains passed, as your situation no longer fits their support criteria.

The advice remains available regarding your tax responsibilities as an employer, by contacting HMRC on:

Telephone: 0300 200 3200

Issues with PAYE Arrears and Paying on Time?

Then you may also write to them at their postal address:

National Insurance Contributions and Employers Office,

HM Revenue and Customs,

BX9 1BX,

PAYE due date?

  • No later than the 22nd of the following tax month, if you pay monthly;
  • Paying quarterly requires payment by the 22nd after the end of the quarter;
  • 19th of the month when paying a posted cheque.

All Employers remain required to account for PAYE to HMRC in real-time. 

Confirm your liability with the Paye Tax Calculator.

For ease of reference, please carry out this function on the following link: the PAYE calculator.

Options on how to pay arrears of PAYE?

HBG Advisory have an excellent track record dealing with PAYE issues. Various options exist to help you handle PAYE arrears. Do not delay in seeking help.

So when owing PAYE, you have the following options:

Penalty for PAYE Late Payment?

HMRC charges penalties from the term ‘the penalty date’, which is generally the day after the due date.

Penalties remain issued as a percentage of the total amount of the tax that remains overdue.

Invoice Finance / Factoring

Invoice or asset-based finance is the ability to sell unpaid due invoices. Unlike traditional finance, which can be impossible for companies with poor credit ratings, invoice lenders assess the company’s credit on the invoice raised.

Therefore, improving cash flow.

Time to Pay Arrangement (TTP) for PAYE

HMRC, if approached early enough, may consider a Time to Pay Arrangement.

Qualification requires directors to prove that the company can afford to repay the PAYE over a maximum of sixty months, together with other taxes due for the tax year.

Company Voluntary Arrangement CVA

For many companies with tax issues with:

  • PAYE;
  • Corporation tax arrears and 
  • VAT debt, 

Then HMRC arrears sounds alarm bells, signifying cash flow issues and potential insolvency. Should company creditors add pressure, but the company remains viable, the company should consider a Company Voluntary Arrangement (CVA) over negotiating a Time to Pay with HMRC. By using a CVA, companies may defer creditor and tax payments for up to sixty months, while paying a percentage of the amount owed. 

A CVA belongs to the insolvency family, though it does not mean the company has failed, requiring immediate closure. Insolvency Practitioners use CVAs to rescue companies, allowing trading to continue and directors to manage the company. IPs act as supervisors of CVAs in England and Wales.

For further detailed reading. Please view ‘Options paying PAYE HMRC arrears.

Can HMRC hold me personally liable for PAYE Debts when my company can’pay PAYE to HMRC?


Should the HMRC consider, you have knowingly, with fraudulent intent, declined to pay. Then they are authorised to present a ‘Personal Liability Notice’ (PLN).

PLN’s grant the HMRC power to hold company directors personally accountable (Section 121C, Social Security Administration Act 1992) in circumstances of fraud or negligence to pay tax. For further detailed reading, please view ‘can HMRC hold directors liable for outstanding tax?’.

If HMRC issue you a penalty?

A notice contains what you owe, how you pay, and what you can do if you disagree with HMRC’s decision to charge you.

Pay the HMRC within 30 days of receipt of the notice. The penalty, failing to do so, will incur interest charged.

You can appeal online through the service operated by HMRC’s PAYE for employers. As soon as you log in, select “Appeal a penalty.” You will receive an immediate confirmation when you submit your appeal.

Sometimes, HMRC accepts and settles the appeal automatically.

Listed below are examples of valid reasons usually accepted by HMRC for appealing:

  • Incorrect data input on returns;
  • Theft or crime;
  • Death;
  • Health issues;
  • Fire, flood, or natural disaster;
  • IT computer failure;
  • Employees no longer employed by you;
  • Tax paid on time;
  • No payments to employees;
  • Time to pay Arrangement operating.

If you wish to appeal in writing? Please send your appeal to:

DM PAYE Late Payment Penalties,

HM Revenue and Customs.

BX9 1EW.

Your Notice of Penalty Assessment contains a ‘Unique ID’ for each penalty.

Ensure you include the unique ID enabling easy identification.

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 safe and private. We help directors daily to navigate the complexities of financial difficulty.

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