Time to pay arrangements & HMRC Debts

Our comprehensive range of services related to Time to Pay Arrangements and HMRC Debts includes:

Time to Pay Arrangements (TTP):

• Evaluation and Eligibility: In order to ascertain whether a Time to Pay Arrangement is suitable, we evaluate your company’s financial status.
• Preparation of the Proposal: Our team will collaborate closely with you to write a strong proposal that outlines repayment terms and circumstances that are reasonable and acceptable to HMRC.
• Communication and talks: We deal with all correspondence and talks with HMRC on your behalf, facilitating a smooth procedure and increasing the possibility of a successful TTP.

HMRC Debt Management:

• Debt study: In order to understand the scope of your HMRC liability, we will analyse your HMRC debts, including tax arrears, fines, and interest.
• Debt Negotiations: Depending on your situation, our professional negotiators work with HMRC to examine different debt management solutions, such payment plans, debt consolidation, or debt write-offs.
• Mitigation of Enforcement Actions: If your business is subject to HMRC enforcement action, such as distraint or winding-up petitions, we may be able to intervene and put plans in place to mitigate the damage and safeguard it. If the business can’t be saved as a going concern, we can also advise on the best way to minimise the loss of value.

Financial Planning and Cash Flow Management:

• Cash Flow Analysis: To give clarity to you and support any proposals, we can create a cash flow forecast which will give credibility to any subsequent proposal and give you the confidence that you can achieve the plan agreed.
• Budgeting and financial forecasting: The cash flow forecast is the most important financial document you can prepare to support a Time To Pay Arrangement, but we can also assist with additional documents such as a forecast budget, balance sheet and profit and loss account which will lend further credibility to any application.
• Business Restructuring: If required, we can create detailed plans for restructuring your businesses finances and putting it on a more sustainable course.

Compliance and Tax Advisory:

• Tax Compliance Reviews: To make sure you adhere to HMRC requirements, we can refer you to recommended experts to examine your businesses tax compliance practices and point out any potential problem areas.
• Tax Planning: Our recommended experts can also give you advice to ensure that you maximise your tax situation without jeopardising compliance, and can offer strategic tax planning assistance to potentially reduce your tax payments while abiding by the law.

How to pay a debt to HMRC with a Time to Pay Arrangement?
People or companies must speak with HMRC directly in order to pay unpaid tax through a Time to Pay Arrangement. It is good to have thorough information about the debt available, including the total amount owing, the causes of the financial hardship, and a suggested payment schedule.

Additional supporting documents will also be of use in supporting the application, with the most important being a realistic cash flow forecast for the proposed duration of the arrangement. HMRC will then evaluate the businesses situation and the information provided and decide whether they believe a Time To Pay arrangement is acceptable. If so they will enter into discussions to finalise any agreement.

What will happen if you do not pay your tax bill?
If you don’t pay your tax bill, HMRC will take the necessary steps to recoup the unpaid balance. They will first issue notifications, demands for payment, and warnings about the repercussions of non-payment. If the tax obligation is still not paid following the various warnings HMRC will issue a winding up petition (for a company or a bankruptcy petition for an individual). If a petition is issued and successfully granted, then the court will make a winding up order for a company (or a bankruptcy order for an individual) which will have potentially catastrophic financial implications for all concerned. If you are at or nearing this stage, then you need to contact us urgently to minimise any damage.

How do you get rid of HMRC debt?
It is crucial to speak with HMRC personally and openly discuss your situation with them in order to begin to address and resolve HMRC debt. HMRC provides both individuals and corporations with a number of alternatives for managing their debt, including Time to Pay Arrangements and settlement negotiations. The best course of action is determined by the particular situation and the amount owing. However, HMRC will always expect to recover as much unpaid tax as possible. Finding a solution to remain solvent whilst paying off your HMRC arrears is best done by cooperating with HMRC and giving correct financial data, along with as much supporting evidence as possible.

How long before HMRC write off debt?
It is highly unlikely that HMRC will ever wipe off unpaid tax that they think is due, and if payment is not forthcoming, then there are a number of enforcement options available to them. The type and amount of tax owing and the businesses situation, are some of the variables that affect how long it takes for HMRC to begin enforcement action and what type of action they will take. In general, HMRC seeks to recover all unpaid tax arrears and will continue to pursue collection efforts until any agreed payment plan or settlement agreement has been settled, or the business enters formal insolvency. It is essential to remember that failure to make payments on unpaid HMRC tax will not result in it being written off after a set period of time if no proactive action is taken.

Can HMRC Refuse a Payment Plan?
Yes, if HMRC decides that a payment plan is not reasonable nor realistic, they have the right to reject it. They will also review past conduct in respect of tax affairs and if they deem it to be unsatisfactory, then they may still refuse a payment plan that seems achievable if they don’t have faith in how the business will conduct itself.. When evaluating a proposed payment plan, HMRC takes into account a number of variables, including the borrower’s financial status, ability to make payments in the agreed instalments, and total amount owing. HMRC will reject the agreement if they feel that the suggested plan is unlikely to result in full payment within a reasonable amount of time. A business restructure is likely to be needed in such circumstances.

Is There Interest on Time to Pay Arrangements?
Yes, Time to Pay Arrangements with HMRC often carry an interest penalty. Over the course of the payback period, interest is accrued and calculated based on the remaining loan balance. When enrolling into a Time to Pay Arrangement, it is crucial to thoroughly read the terms and conditions offered by HMRC.

Can I Arrange TTP Arrangements for Longer than 12 Months?
HMRC’s default stance is that they will not accept payment plans that last for more than 12 months unless there are exceptional circumstances. If you believe you would require more than 12 months to repay the unpaid tax, then it is likely you will need to enter into a Creditors Voluntary Arrangement (CVA). Please contact us and we can explain what this is in greater detail. However, if you believe any repayment plan would need to be more than 12 months, it is still worth going through the exercise of exploring this with HMRC as it would be significantly cheaper than entering into a CVA.

Can HMRC see my bank balance?
HM Revenue and Customs (HMRC) has significant powers as a government tax authority to administer tax collection. and whilst HMRC does have access to a variety of sources of information, there are legal restrictions and privacy requirements that prevent them from immediately viewing bank information without the necessary consent.

The typical methods and channels used by HMRC to gather financial information include making requests for relevant paperwork, carrying out investigations, and working with financial institutions, such as credit referencing agencies. However, it is crucial to remember that HMRC is subject to stringent regulatory requirements, including proper information usage and observance of data privacy rules.