HMRC Debt Management

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If you have outstanding HMRC debts, it is important to deal with them as soon as possible. Here, we aim to explain the process and your potential options when looking to pay outstanding business debt.

What are the implications of not paying HMRC debts?

HMRC requires each company to meet tax and VAT obligations within a specified timeline. Therefore, late payments can attract default surcharges or serious penalties.

If you fail to contact HMRC in time, they may decide to take severe measures to recover any outstanding tax arrears, such as seizing some of your business assets.

HMRC wants to know that you are making arrangements to pay the debt in a reasonable time frame. HMRC takes an “Enforcement Action” in cases where they learn that an agreement to settle the HMRC tax debt cannot be reached. The action can come in a variety of different forms, including:

• Forcing closure of your business
• Serving a winding up petition against your business
• Hiring the services of a licensed debt collection agency or HMRC bailiff.
• Repossessing and selling your assets to recover the debt

As a consequence, it is advisable to contact HMRC swiftly – ideally with the guidance of a financial expert.

HMRC Debt Management Services

You have a number of options for dealing with HMRC arrears, these include:

Company Voluntary Arrangement

We are able to advise whether a CVA may be the best for the circumstances of your company. This involves entering into an agreement to pay off a portion of your debts on a monthly basis, which will stop your creditors from taking legal action against your business.

Company Voluntary Arrangements are a very good tool for helping your business stay active, and to prevent winding up petitions.

HMRC Debt Management Services

 

HMRC Debt Management Plans

A debt management plan is used when you cannot afford to pay your creditors the amount due but are able to make arrangements to pay in the future. When dealing with HMRC arrears, it’s vital that you act as soon as you know there is an issue.

This avoids future problems, many of which could lead to HMRC serving you a winding up petition and forcing you to liquidate your business. Our experts are able to set up a suitable plan which will enable you to avoid this.

What are HMRC time-to-pay arrangements?

A HMRC Time to Pay Arrangement is an agreement between your company and HMRC. The aim is for your company to settle its arrears over a specified period of time. 

A request for a Time to Pay Arrangement must be submitted in writing. Here, you have to detail your company’s financial position and evidence of inability to pay your debt. Depending on your financial circumstances, HMRC will decide upon an arrangement that allows you to pay your debt in monthly installments.

 

HMRC Debt Management support at Insolvency Experts 

If you have outstanding HMRC tax arrears, you should contact a financial expert for advice before contacting HMRC. Our financial experts have vast expertise and experience in helping clients to agree on a HMRC TTP (Time to Pay) arrangement or other tax repayment arrangements with HMRC.