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The number one creditor for most businesses struggling with debts is HMRC – whether that be an unforeseen VAT bill, PAYE liability or a corporation tax bill. If your business falls into HMRC arrears, not only will it trigger the fact that your business may be insolvent, but it may also attract scrutiny from HMRC.

If you begin to fall behind with HMRC, in VAT arrears or any other unpaid bill, it’s imperative to seek professional advice at the earliest opportunity, as you have a number of options open to you if you seek advice at an early stage.

As you look for guidance on how to pay HMRC VAT arrears in the way that best protects your financial interests, you should look for a trusted financial professional who can help protect the financial interests of your business.

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Table of Contents

What are my responsibilities with regards to HMRC VAT?

Once you register to be paying VAT, HMRC assumes that you have an obligation to file, submit, and pay your VAT bill on time. As a consequence, you need to know how to pay HMRC VAT to avoid the consequences associated with late payment.

Most businesses submit their VAT returns annually or quarterly. If you exceed the quarterly threshold, or you have had trouble settling your VAT in the past, HMRC may require you to settle your VAT returns on a monthly basis.

A portion of businesses prefer to pay their VAT through the “Annual Accounting Scheme.” In this case, you have to file and pay your VAT returns within 60 days after the expiry of your accounting period. Any failure to meet your HMRC VAT bill, or any other issues such as corporation tax, will lead to you falling into HMRC arrears.

What are the penalties for unpaid HMRC bills?

HMRC commences a debt recovery process when they realise that you cannot pay your VAT arrears on time. The outcomes of an HMRC debt recovery process are usually serious to defaulters andcan end in a winding up or bankruptcy petition.

At this point, seeking expert financial advice on how to clear your HMRC arrears is of paramount importance, as a lack of payment. HMRC may affect penalties and surcharge to businesses and individuals, with specific HMRC arrears penalties related to unpaid VAT including:

  • Submitting paper VAT returns instead of making online returns may attract a penalty of up to £400
  • If you submit VAT returns that are too low and fail to inform HMRC on time, you can be charged 30% for an assessment
  • A 100% penalty can apply to any over-claimed or over-stated tax if you send VAT returns that include deliberate or careless inaccuracy.

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What are my options for dealing with HMRC Arrears?

In terms of knowing how to deal with HMRC arrears, whether with regards to how to pay HMRC VAT, or any other outstanding payments, you have two key options:

  • Company Voluntary Arrangement:
    We are able to advise whether a CVA may be the best for the circumstances of your company – whereby you enter into an agreement to pay off a portion of your debts on a monthly basis, stopping your creditors from taking legal action against your business. Company Voluntary Arrangements are a very good tool for helping your business stay afloat, and to stop winding up petitions. To find out whether a CVA is right for your business contact our team.
  • Debt management plans:
    A debt management plan is used when you cannot afford to pay your creditors the amount falling due in the previously agreed terms but will be able to make repayments further down the line. A licensed debt management company will be able to set up the plan for you.When dealing with HMRC arrears, it’s vital that you act as soon as you know there is an issue. This avoids problems further down the line, many of which could even lead to HMRC serving you a winding up petition and forcing you to liquidate your business. Our VAT arrears experts can help you avoid this.


How do I find the right help with my HMRC arrears?

Understandably, dealing with financial pressure from HMRC is a worrying time for any company director, but finding the right support with an HMRC VAT debt management matter can make the process a lot more manageable.

You can contact The Insolvency Experts today for advice on how to pay HMRC VAT or any other financial issues with HMRC. The Insolvency Experts has been helping many individuals and businesses in many parts of the UK to settle their HMRC arrears. We can advise on HMRC VAT time to pay arrangements.

The Insolvency Experts can help provide debt management advice on what to do if you’re about to fall behind with HMRC payments or if you’re already in arrears. If you’ve already been served a winding up petition, then we can still help. Call to speak to one of our advisors now on 0300 303 8284.

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How we’ve helped others through
rescuing their business

At the Insolvency Experts our sole aim is to rescue, recover and renew businesses that are in difficulty. We are specialists in corporate turnaround and help business overcome cash flow difficulties and other financial problems. Our experts:

  • Help you to take the appropriate steps to meet any impending deadlines
  • Have a long track record in helping companies in similar positions
  • Can help you take the best course of action, often using your assets to help you avoid additional cost

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Why Choose Us?

We understand you have already made every effort to avoid insolvency and day to day life is stressful at the moment. We can start immediately and quickly work with you through the process.

We see many examples of great businesses that have fallen on hard times or suffered through no fault of their own.

We understand that the company directors and shareholders have already tried valiantly to carry on trading, but circumstances dictate that this is no longer possible.

  • We Remove Stress
  • We Act Quickly
  • We Are Cost Effective
  • We Are Formally Accredited
  • We Are CVL Experts
  • We Act Confidentially

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