What Is HMRC Time To Pay?
If a company is facing financial difficulty then they may be struggling to pay their liabilities as they fall due. As part of this, they may be unable to pay their tax bills on time. If you’re the director of a company that is experiencing this, the worst thing you can do is bury your head in the sand. Contacting HMRC as soon as you’re starting to default on payments will provide you with options for your company, rather than letting the problem escalate. One of the options that may benefit your company in this situation is the HMRC Time To Pay scheme. Let’s take a closer look at what this involves.
What Is Involved In An HMRC Time To Pay Arrangement?
An HMRC Time To Pay Arrangement is a structured repayment plan that allows companies to repay their tax bills in instalments. A typical HMRC Time To Pay arrangement will last 12 months, however this will depend on the individual circumstances of the company, as agreed with HMRC. Tackling your debt head on by communicating with HMRC will provide your company with a much better chance of recovering. If you ignore deadlines, you’re likely to be faced with penalties that could further weaken the finances of your company.
Who Is Eligible For HMRC Time To Pay?
HMRC Time To Pay arrangements aren’t given out lightly, so as you can imagine there are certain criteria that a company will need to meet in order to be eligible. Specifically, there will need to be evidence that the company can afford to make the payments as set out in the plan. In addition to this, HMRC will be looking to see that the company has been reliable in complying with previous tax returns and whether or not they have engaged in an HMRC Time To Pay arrangement previously. This all involves HMRC assessing the risk in engaging with the repayment plan. They must see a convincing argument as to why the company cannot pay their tax bill and evidence of their commitment to paying back their liabilities through the agreement.
How Do I Set Up An HMRC Time To Pay Plan?
You can apply for an HMRC Time To Pay arrangement online if you:
- have filed your latest tax return
- owe less than £30,000
- are within 60 days of the payment deadline
- plan to pay your debt off within the next 12 months or less
If you cannot make your own HMRC Time To Pay arrangements online, for example if you owe more than £30,000 then you can call the Self Assessment Payment Helpline, details of which are on the gov.uk website.
As a company director it’s essential that you only agree to payments that are manageable as failing to keep to the agreement can have serious repercussions. You may well receive a penalty, or in the worst case, could be faced with legal action.
If your company is facing mounting debts and you are concerned that it may be facing insolvency, it’s important to seek professional help as early as possible. A licensed insolvency practitioner will be able to talk you through the best options available for your company whether that’s liquidation or a business rescue plan. Don’t hesitate to get in touch with the team at My Liquidation today for confidential guidance.
