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Owing HMRC Money

When owing the HMRC money, firstly, don’t panic.

Owing tax to the HMRC, considerable money can however be handled.

It is essential once you establish the amount that you seek help, preferably sooner than later. 

Likewise, do not let the worry impact your health.

A limited company owing money to HMRC, however, requires dealing with to ensure directors. Therefore, don’t fall foul of directors’ responsibilities and duties.

HBG Advisory are here to help you when owing HMRC money.

  • You as an individual;
  • Your limited company;
  • Or both you and your company?

It is essential to understand that you and your company are separate legal entities.

Tax liabilities owed by your company like;

  • VAT;
  • Employers/Employee PAYE;
  • National Insurance;
  • Corporation Tax.

However, remain the liability of the company, not you as an individual.

Dealing with HMRC debt, options remain available for limited companies.

If the company is viable, it may arrange:

For further reading, view ‘What does business recovery mean‘?

However, if your company is no longer viable. You may:

  • Wait for HMRC to wind your company up;
  • Propose creditors voluntary liquidation.

Owing HMRC Money – Can I pay HMRC by instalments?

Maybe. Paying tax monthly may make financial sense for you, but you can’t merely choose to pay HMRC this way. You require setting up a ‘Time to Pay’ (TTP) arrangement with HMRC. 

To do so needs you to contact HMRC Debt Management and Banking Department (DMB).

Should they then agree, a monthly payment plan is set in place to discharge the tax debt, usually within twelve months or less?

However, a limited company has the right to request additional time to pay their tax, although HMRC remains not obligated to approve extra time. If  HMRC has any reason whatsoever to doubt payment performance, they will decline extra time.

Suppose HMRC rejects your TTP arrangement. Therefore, your company must protect the company’s creditors, not worsen its position, and not increase debt. If your company holds no alternative option to pay the tax debt, you need to seek an insolvency practitioner to deal with the issue formally.

Should the debt be personal, consider speaking to a sister practice within our group – McAlister & Co, who remain regulated to advise you on your situation.

You may contact them by contacting our office, and we will ensure that a member of the individual team at Mc Alister & Co will assist.

For further assistance, view: Business and Company Debt help.

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Employees and redundancy when in liquidation
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