HMRC time to pay agreements

In November 2008 the Government announced a dedicated Business Support Service Helpline designed to meet the needs of businesses facing temporary financial difficulties caused by the economic conditions at that time. As a result thousands of businesses applied for and have been granted Time to Pay (“TTP”) liabilities due to HM Revenue & Customs (“HMRC”).

HMRC will still consider requests for TTP but these are now dealt with by local collectors of taxes. Basic criteria needs to be met including:

  • HMRC will want your best payment proposals over as short a period as possible
  • They prefer to be contacted in advance if payments to them are going to be late or if you know that you are going to have problems making a payment
  • A typical TTP will involve the arrears being paid off by regular monthly payments with future tax liabilities being paid strictly on time
  • TTP arrangements are typically for a few months. TTP’s lasting for over a year are only agreed in exceptional cases
  • Multiple requests for TTP and failed TTPs will result on future requests being frowned upon

HMRC will not reduce the amount of tax interest and penalties due under a TTP arrangement. However, if the tax liability is based on assessments raised by HMRC and you are able to submit returns which cover the assessed periods then they will recalculate the liability based on the returns and amend the interest and penalties at the same time.

One development that we increasingly see is that where HMRC decline a TTP request and you can demonstrate that HM Revenue will be worse off if they wind your company up you can leave your TTP proposal on the table and proceed to implement it – by making the promised payments – and they may adopt a “we will not agree but will not take enforcement action while we wait to see if you can honour your TTP proposal” approach.

At McTear Williams & Wood we work extensively with businesses experiencing financial difficulties and are ideally placed to help you negotiate a TTP agreement with HMRC. We offer a free confidential no obligation meeting which forms the starting point for negotiations to commence.

If you would like to discuss this issue further then do contact us. We are happy to have an initial confidential and charge free meeting either face to face, on or off your premises or over the telephone. For further information telephone 0800 331 7417.

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