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.
23rd May 2016 Some new entrants into the UK’s market for small and medium-sized enterprise (SME) loans and credit facilities are “as bad as payday lenders” in the consumer credit sector.
17th May 2016 Small and medium-sized enterprises (SMEs) around the UK are being particularly impacted by HMRC’s clampdown on errors relating to payroll taxation.
10th May 2016 A group made up of several hundred of the world’s leading economists have called for steps to be taken by relevant authorities and law-makers to effectively end the use of tax havens around the world.
6th May 2016 The number of Scotland-registered companies entering insolvency during 2015-16 increased as compared with the prior 12 months but personal insolvency rates continued their downward trajectory.
3rd May 2016 SMEs throughout the UK are collectively missing out on millions of pounds in savings because they are not aware of tax reliefs and government allowances that could be available to them.
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.