Time to Pay Arrangement
HMRC Time to Pay Arrangements
Keeping upto date with Her Majesty’s Revenue & Customs (HMRC) and paying taxes such as VAT and PAYE, is often one of the first things which director’s fall behind on when a company begins to experience cash flow issues.
Her Majesty’s Revenue & Customs (HMRC) is the most common business creditor, and the majority of insolvent companies will owe some form of debt to HMRC. The Finance Act 2020 however has amended the current insolvency regime and in consequence, HMRC will regain secondary preferential status for claims relating to taxes collected on its behalf but limited to VAT, PAYE, Employee NIC’s, and Construction Industry Scheme (CIS) Deductions.
What Is a Time to Pay Arrangement?
A Time To Pay Arrangement provides the platform for your debt to HMRC to be paid back depending on your business circumstances and affordability, but typically in monthly instalments, over a 12-month period.
As a Business Recovery option, negotiating and agreeing a TTP Arrangement may provide significant breathing space for business owners and directors.
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Get Help TodayNegotiating Time to Pay with HMRC
HMRC will view the long-term viability of your company and also the probability of a Time To Pay being successful. A previous track record helps but other areas to consider.
HMRC will not agree to any Time to Pay arrangement unless they are confident that you will be able to keep up with the payments
Present a case to HMRC and explain why you can’t pay the amount owed, and how much you are hoping to offer as a monthly payment.
Be honest. State what you can comfortably afford and do not overstate this figure. Being realistic with HMRC is likely to make them view your call in a positive manner and also instil some confidence in your ability to keep up with the payments. If you falsify or mislead HMRC they can, and often will, terminate the agreement
Entering into a TTP arrangement does not reduce the total amount of tax owed, it simply allows for the balance to be cleared in instalments.
Lucas Ross will offer a free initial consultation so that we can help you better understand Time to Pay.