HMRC Time to Pay Arrangement

The taxman is vigilant, demanding and knows financial law inside-out. Trying to fool him is a complete waste of time, as once you get caught you’ll be given far more than just a light slap on the wrist.

Attempting to mislead HMRC in any way will land you in some dangerously hot water, with heavy fines, criminal records and jail time all distinct possibilities. Honesty is key when it comes to the taxman. Always do your utmost to keep your business arrears in order and pay on time, but be completely frank with HMRC when you have an issue.

Contacting HMRC

If you have an inquiry or problem with regard to your taxes, you’ll need to contact HMRC immediately to get the issue resolved. HMRC states on their website that they prefer to be contacted via telephone, but they will make exceptions for certain disabilities like the hearing-impaired.

When assessing tax payback strategies, HMRC will take a look at the viability of your company, and what sort of chance a Time to Pay plan has of being successful. HMRC will also look at appropriate alternatives that may be possible if you do not stick to the agreed tax payment plan.

HMRC believe that telephone contact is the most efficient mode of contact, and will allow them to make a decision about your company’s tax position quickly. When you call up, the HMRC interviewer will use this opportunity to advise you of your rights and what the penalties may be if you don’t keep to the arrangement, or falsify information in any way.

How Much ‘Time to Pay’ Will I Be Given?

When it comes to Time to Pay (TTP) plans, every business is different. HMRC realise that many businesses are experiencing cashflow problems, especially during the current recession, and companies have the statutory right to request instalment repayments. Usually the TTP arrangement is set for a period of three to six months, but these instalments are discretionary and can be modified.

Any TTP plans that drag on for longer than a year will have to be exceptional cases, as ordinarily this amount of time would not be permitted. However, each case is reviewed individually so TTP timeframes will vary from company to company. If your company needs a longer instalment plan, other recovery options may be more suited to your needs.

A business may be under performing or experiencing difficulties for a variety of reasons. The problems may well prove to be less serious than initially anticipated. But it is essential that the problems are isolated and the causes identified if we are to first provide you with constructive assistance in devising a TTP. At My Insolvency, we aim to give you the best possible advice so if you're feeling completely lost, contact us and let us help you out.

Freelancer Essentials

Principles and Guidelines of Time to Pay...

It’s important to remember that HMRC will not reduce the total amount of tax due when a TTP arrangement is agreed upon. Many business owners expect the taxman to cut them some slack, but regardless of your situation you’ll still be requested to pay every penny that you owe. Some of the principles and guidelines of TTP are:

  • Reasonable Proposals

    Customers MUST make a reasonable proposal in terms of what they can afford to pay over a certain time period.

  • Payback Ability

    HMRC will need to be satisfied that you can actually pay the money back before a certain time.

  • Legitimate Reasons

    TTP is for companies who need extra time to pay taxes because of financial problems, not for company directors who simply want to delay paying tax because they consider it to be an inconvenience.

  • Constant Communication

    You must stay in contact with HMRC at all times, and notify them if there are any changes to your financial situation whatsoever.

  • Risk-Based Decision

    HMRC want their money, so they’ll require additional information for companies they consider to be "high risk".

  • TTP Is For Taxes

    TTP plans are for tax and tax only. They will be paid over the shortest time possible and will not be agreed to for any reason other than repaying tax.

Can HMRC Break the Agreement?

The law states that HMRC must keep to TTP arrangements under strict criteria. If there are any changes in your company’s circumstances which wouldn’t be supportive of the TTP plan, they have the right to break the agreement.

Honesty is imperative when it comes to the issue of taxes, and if the HMRC discover that you have misled them in any way they can tear up the TTP contract. Remember, Time to Pay is for temporarily distressed companies that have the capability of future viability. If you should be wound up by a creditor, or are on the verge of becoming wound up, they may very well cancel their agreement. It is essential that the problems with any historical debt with HMRC is isolated asap, if we are to provide you with assistance in devising a TTP.

At My Insolvency, we aim to give you the best possible advice. If you are in arrears for VAT or PAYE and the pressure from HMRC is mounting then there is no time to waste, contact us today and let us help you out before the pressure is increased to the next level with HMRC issuing a Petition for your company's winding up.