Debtor's Guide to HMRC Time to Pay Arrangements
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Are you considering a Time to Pay (TTP) arrangement because either you or your business is struggling with Her Majesty’s Revenue and Customs (HMRC) debts?
If you're still reading, you probably have an unresolved problem with HMRC or owe them money. You may have received a:
Contact I&L today if you need:
- More time to rearrange your finances
- Free and confidential advice concerning tax problems.
Time to Pay is an informal agreement that provides debtors with an opportunity to demonstrate they take their HMRC debt seriously. To qualify, debtors (you) must agree to pay all of their current liabilities on time. Additionally, you must repay any historic debts over 6 to 12 months, depending on the agreement terms.
The process is pretty much the same whether you're approaching HMRC as an individual or a company. Tell us about your issue and the outcome you'd like to achieve. We make representation on behalf of companies and individuals to HMRC, and try to give them good reason to entertain a Time to Pay arrangement. HMRC want liabilities to be paid within 6 months. With good reason, however, they will extend that period up to 12 months.
Benefits of TTP
It's helpful if you can explain how in your particular circumstance Time to Pay is a better alternative than statutory insolvency procedures. For example, a Time to Pay arrangement is far more appealing than a Company Voluntary Arrangement (CVA) or an Individual Voluntary Arrangement (IVA), which pay out less money and take up to 5 years to conclude. In summary, a debtor’s conversation with HMRC should go something like this:
"I concede that my company owes £100,000. If you agree to a TTP arrangement, we’ll clear these tax debts by paying £10,000-a-month over 10 months. But if you reject our proposition, I’ll probably be forced into either an IVA or a CVA, and under those circumstances it’s likely that you’ll only receive £1,000-a-month for 60 months."
Few debtors are aware of the leverage they have because Time to Pay is the far more attractive option. However, it's probably best to remain humble because if you're too arrogant HMRC will simply wind your company up, or present you with a Bankruptcy Petition if you're an individual.
Negotiating with HMRC can be stressful. I&L has a proven track record of successfully dealing with HMRC on behalf of our clients. We’re confident that our expert service will be of value to you. Visit our testimonial page to see some of the people we’ve helped, and call 020 7504 1300 for free and confidential advice…