Covid 19 has had a huge impact on UK ltd companies being able to pay their HMRC bills on time, this included VAT, PAYE, and Corporation Tax. Businesses of all shapes and sizes across the UK are experiencing cash flow difficulties right now and thankfully the HMRC understands and are being very, very flexible. HMRC time to pay arrangements are being offered to many businesses.
Lots of small business owners seem to be scared of the HMRC and put off speaking to them until they have the bailiff at the door, this is a mistake and just adds to the stress and anxiety that you may be feeling.
If you have unpaid tax bills to HMRC and you can’t pay them then you might want to consider a Time To Pay Arrangement.
Let’s be honest here when your business struggles with cashflow lots of people will stop paying the HMRC, you don’t hear from them in what seems to be forever and then bang, a HMRC enforcement officer is on your doorstep threatening to levy goods. Thankfully there is a solution and its a relatively easy one to put in place.
So What Is a Time To Pay Arrangement?
A TTP arrangement allows you to negotiate with the HMRC to pay back your HMRC arrears over an extended period of time, before Covid it would be 12 months max, recently I know of at least one company who spread the payments over 2 years!!! Even if you have been behind on your taxes in the past this option could still be available to help your businesses cashflow problems. If you have been late before with HMRC and had previous Time To Pay Arrangements in place I suggest you give us a quick call to discuss how to tackle this latest problem.
How do you do it?
Right let’s get the worse thing out of the way first, you’re going to have to phone them and this can take a llooooooooonnnnnnnnnnnggggggg time, I’d block out at least 2 hours in your diary as they are experiencing delays due to Covid.
When you finally get on the phone to someone that can help you going to need to have all the relevant tax reference numbers handy for the debts that you want to add into the TTP. It is soul-destroying to wait all the time to speak to someone then realise you don’t have the PAYE reference number [ I have done this ] as you will need to start the whole process again!
There are a few things that HMRC want to be sure of such as:
- Is the business viable?
- Will you be able to keep up with the payment plan
- They will ask you have you thought about a loan or paying it on a credit card [the answer to this if you was wondering is, “no I can’t raise any money”]
Once your TTP arrangement is agreed you need to make sure that you stick to it and keep up with the plan.
Another positive to a Time To Pay Arrangement is you won’t get any more late penalty fines but you are going to accrue interest on the debt.
What if I can’t pay anything?
Listen, you are not the only one who is in this position, and if you have HMRC arrears that are due and you have no way to pay them then the best advice is to communicate with them. Just so everyone is clear, HMRC understands what’s going on right now and they will almost certainly give you some breathing space while the world gets back to normal. The key thing is to pick the phone up and let them know.
Sometimes a Time To Pay Arrangement is not the best way forward for your company but whatever the weather if you are worried about your company finances don’t suffer in silence. Get in touch for free, independent, no strings, and no obligation conversations. There is help out there.