With the widespread disruption to businesses caused by COVID-19 and the lockdown, HMRC have both extended and relaxed some of the rules on eligibility for time to pay arrangements.
A time to pay arrangement allows a company to pay their HMRC debt in monthly instalments, usually up to a 12-month period. Although, depending on your circumstances, you may be able to agree a longer term.
If you are experiencing problems in meeting VAT, PAYE and/or Corporation Tax liabilities, then options are available to you and your business to avoid insolvency.
There are various criteria that a company has to meet to be considered for a payment plan, including but not limited to: –
- Demonstrating that the business is viable in the long term.
- Historical track record (i.e. has the company been down this road before and if so, did they abide by any previous agreement to pay arrears).
If a company is able to meet the new criteria of HMRC, then a time to pay arrangement can be negotiated to install a payment plan. If agreed, this will halt HMRC from any ongoing or imminent debt collection proceedings, giving the company breathing space to trade themselves out of their current situation.
It’s important to remember that HMRC will not reduce the total amount of tax due when a time to pay 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.
At My Insolvency, we aim to give you the best possible advice. If you are in arrears for VAT, PAYE and/or Corporation Tax, there is no time to waste. Contact us today and let us help you before the pressure is increased to the next level, with HMRC issuing a Petition for your company’s winding up.
*For details on how to contact the HMRC regarding time to pay arrangements, visit their website.