HMRC can be very strict with ensuring that tax payments are made on time and is very quick to follow up if a business owes money.
HMRC can be very strict with ensuring tax payments are made on time and is very quick to follow up if a business owes money, potentially leading to penalties. For this reason, it is vital that you communicate with HMRC if you think it unlikely that you will be able to make an upcoming tax payment. Should you get in touch with HMRC and explain that you are unable to make a payment, you may be offered a Time To Pay arrangement.
What is a Time To Pay (TTP) arrangement?
The Time To Pay (TTP) scheme, run by HMRC, can help to ease cash flow by reducing the pressure on working capital. You will typically be afforded an additional 3-6 months in which to make the payment, but in certain circumstances you may be able to negotiate a longer extension.
The most significant benefit of a TTP arrangement is that, once agreed, no further penalties will be applied to the debt(s) accounted for within the arrangement, as long as payments are made by the agreed updated deadline. This can, of course, significantly ease the pressure on a business’ cash flow and allows you, the business owner, to focus your attentions on running the business, rather than on juggling tax debts.
How do I apply for a Time To Pay (TTP) arrangement?
If you are worrying that you will be unable to make an upcoming tax payment and feel you might benefit from a little breathing room afforded by a TTP arrangement, you’ll need to present a strong business case to HMRC in favour of such an agreement. This will likely need to include detailed cash and sales projections, an outline of the changes you intend to make in order to ensure that the business will be able to make payment, and a reasonable explanation as to why the business has been unable to make payment within the original terms.
It is vital that you are prepared to answer, in detail, any and all questions that HMRC might have in order to prove that you are serious about making your payments.
Negotiating a Time To Pay (TTP) arrangement
HMRC will want you to repay your tax liabilities as quick as possible, but it is important that you only agree to terms that make repayments affordable and realistic, as failure to make a payment within the time period laid out in your TTP arrangement may lead to HMRC cancelling the arrangement and even presenting a winding up petition against the business. HMRC are involuntary creditors, which means they act swiftly in recovering money owed.
Seeking professional help with tax arrears
If you think your company might benefit from a Time To Pay (TTP) arrangement, the expert business recovery specialists at Voscap can help. Likewise, if you have had a TTP application rejected, we can discuss other options available that could help you pay your tax arrears.
To find out more, contact Voscap at 020 7769 6831 or email firstname.lastname@example.org to speak to one of our business recovery specialists.