Negotiations with HMRC

Having an experienced advisor negotiate with HMRC on your behalf can result in better outcomes

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Time to Pay Arrangements with HMRC

What is a Time to Pay Arrangement with HMRC?

When most companies are experiencing cash flow problems, one of the first things that tends to get behind is the paying of taxes such as PAYE, VAT, and Corporation Tax. HMRC are the most common business creditor, and most insolvent companies will owe some form of debt to HMRC.

A Time to Pay Arrangement with HMRC is a debt repayment plan for a company’s overdue taxes. A company can request time to pay their overdue taxes, usually over a period of six to twelve months. Although, depending on your business circumstances and how much the business can afford, some arrangements can be agreed over longer periods of time.

Find out how we can help with HMRC negotiations.

What’s involved in requesting a Time to Pay Arrangement?

It requires a formal request to HMRC

A formal request must be made to HMRC for a Time to Pay Arrangement and this involves a degree of interaction and negotiation, normally by phone followed by a written proposal. As part of the process, HMRC will advise you of your rights and what the penalties may be if you don’t keep to the arrangement or falsify information in any way.

The written proposal would normally include cash flow projections, details of why you should be allowed time to pay and confirmation of affordability and commitment to adhere to the arrangement.

During the call HMRC will assess: The likelihood of repayments being successful, the longer-term viability of the company and what the options would be if the planned repayments are not maintained.

It’s important not to offer to pay back more than you can afford.

Company Directors can negotiate directly with HMRC, however, many find it beneficial to have an experienced third party undertake this on their behalf.

Our experienced advisors can handle this for you, and we will liaise with HMRC on your behalf using our expert knowledge to give you the best chance of securing a suitable arrangement.

Formulating a strong and compelling case for why you should be granted a Time to Pay Arrangement is the most effective approach you can take, however, HMRC will look at a range of aspects when considering your request such as:

  • Your previous compliance with tax rules and regulations which would include filing taxes late and not paying on time.
  • Your previous experience of Time to Pay Arrangements, if any.
  • Specific risks associated with your type of business or particular industry.

Be sure about your next step.

If you are experiencing cash flow problems and are behind in your HMRC payments for PAYE, VAT or Corporation Tax, book your free consultation and speak with one of our specialist advisors.

Find out how we can help with HMRC negotiations

Qualification for a Time to Pay Arrangement

Mounting debts with HMRC are a sign of financial distress, seek advice early

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The risks of HMRC led compulsory liquidation

  • You lose control, all decisions are taken by others.
  • Your conduct as a director will be under increased scrutiny by the Official Receiver or appointed insolvency practitioner.
  • The Official Receiver is obligated to conduct a post-liquidation investigation to assess if you have been guilty of wrongful or fraudulent trading.
  • By continuing to trade until the winding up petition has been presented you may be accused of not taking action in time to protect creditors and may be held personally liable for this.

HMRC’s responsibility to collect taxes

HMRC have a responsibility to collect as much of the taxes due from commercial organisations as possible and as efficiently as possible.

It’s important to recognise this to better understand why and how HMRC will pursue a business for outstanding PAYE, VAT and Corporation Tax and in what circumstances they will consider other options.

Statutory demands and winding up petitions

If HMRC identify that taxes are not being paid on time and the debt is increasing, they are looking for it to be repaid immediately or for an agreed proposal to be put in place. In the absence of this they will pursue the company and this can include a statutory demand and a winding up petition to liquidate the company.


Why you should take action before a winding up petition has been filed

Once a winding up petition has been filed it severely restricts your options and you cannot:

  • Sell the company or its assets, as this sale may be reversed by the Court
  • Issue a Notice of Intention (NOI) to appoint an Administrator
  • Put the company into Pre Pack Administration


And it makes it almost impossible to put the company into creditors voluntary liquidation.