We’ve been behind on PAYE for several months now and we’re concerned about the possibility of actions being taken against our company. We would like to resolve this issue by catching up on our taxes as quickly as possible, however we don’t feel that will be possible unless HMRC gives us extra time to pay our debt. Being that we’ve never negotiated with HMRC before, we’re unsure about the likelihood of being granted leniency, especially considering how long we’ve owed taxes. Is a ‘Time to Pay’ instalment plan an ideal option for our business? What do we have to do to qualify and obtain approval for such an arrangement?
It is good that you recognise HMRC’s ability to penalise your company for filing and submitting late taxes but unfortunately, there are a great number of variables which could affect our advice to you. The first consideration would be to look at why you have been submitting taxes monthly and what kind of taxes you are talking about. We are assuming you are referring to PAYE taxes which you have previously been paying on the monthly scheme. Going forward, we would need to assess how much you should have been paying in the previous months. It just might be possible to set you up with an alternative payment plan.
To explain further, companies which are not paying at least £1,500 per month in PAYE taxes and NICs for their employees may be eligible to submit payment quarterly and in some cases even annually! Smaller employers can be set up with a quarterly plan and sometimes when employees are paid taxable income in a single month the payments can be made to HMRC once a year as well.
Now then, the easy answer would have simply been to say no, HMRC does not always allow companies to participate in the Time to Pay (TTP) Scheme. They will first seek to determine whether a company is unable to pay on time or just unwilling to pay. Another factor would be your willingness to communicate with them as soon as you know you will not be making those payments timely. If the taxman sees that you are making an effort to act responsibly, your chances of getting time to pay are much better.
Having said all of this, it is unfortunate that you have already let several months slip by. Contact us at your very first convenience so that we can provide a free consultation to help you understand your options. HMRC may be willing to negotiate with you, but if you let it slide any longer it may not work in your favour. Can they take further actions? Indeed they can, so don’t hesitate to speak with one of our expert insolvency practitioners who can help you resolve the problem before HMRC imposes penalties up to and including distraint.
29th March 2017 Leaders from across the UK’s food industry have outlined some of their concerns about the potential damage that a bad Brexit deal might do to their operations in the coming years.
23rd March 2017 The incoming changes to the business rates regime in the UK are already taking their toll on small businesses throughout the country.
22nd March 2017 Companies within the UK’s construction industry could lose as much as 8 per cent of their workforces on average as a result of Britain’s departure from the European Union (EU).
10th March 2017 The tax burdens faced by pubs throughout the UK are threatening the survival of the entire industry, according to the boss of one of the largest pub chains in the country.
8th March 2017 The Chancellor has announced his 2017 Spring Budget featuring some changes which will affect businesses up and down the country. Find out more about what Phillip Hammond unveiled today.
Every day we help companies just like yours turn things around against seemingly impossible odds, regardless of your situation we can help. Find your nearest office today.