Whilst working with our clients over the last few months, HMRC have demonstrated willingness to accept Time to Pay (TTP) arrangements over extended time periods than previously acceptable in order to help businesses directly impacted by Covid-19.
Support is being offered through repayment instalments at whatever level companies can afford at present, with no maximum time period set in stone (typically 12 months).
It is encouraged to make smaller payments whether weekly or monthly with the view to increase instalments if/when possible. We recommend communicating trading difficulties and paying towards arrears rather than delay, as HMRC are still implementing late payment interest and the default surcharge regime.
Case Study – Engineering Company
- History of Time to Pay arrangements – several over the past 5 years
- Failed latest TTP due to Covid-19
- Pre-Covid arrears £180k (total debt £275k)
- Majority of work delayed to 2021 due to the pandemic
- The company took advantage of the government initiatives, furloughing most staff
- A warning of Notice of Requirement (NoR) to give security over VAT & PAYE was issued to the company
HMRC Time to Pay Arrangement for £275k secured over 2 years
- Company arrears had previously progressed to Debt Enforcement. A result of insufficient unencumbered assets over which to secure a further TTP
- HMRC liabilities increased to £275,000
- Likely the case would have passed to Enforcement and Insolvency Service due to compliance history and maximum TTP time frames
- Contact was made with the Securities team to ensure the NoR action was held whilst negotiating a TTP
- Through maintaining contact with HMRC and agreeing a TTP arrangement, the Securities team subsequently withdrew action. Failure to meet a NoR once issued can result in fines/prosecution
- Included in arrangement – Deferred VAT in addition to overdue repayment of Coronavirus Job Retention Scheme PAYE & NIC
If you have any clients experiencing issues with HMRC, or for more information on how we can help get in touch with the Corporate Strategies team on email@example.com.
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