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Written by Keith Tully
We owe a pretty hefty amount of VAT to HMRC, and although we don’t want to risk the repercussions of not paying, we simply can’t afford to pay everything we owe in one lump sum. Is it possible to work out an agreement with HMRC to make payments toward our debt on a monthly basis? If so, what do we need to do to arrange such an agreement?
The first question we would ask you is whether or not you have ever been late paying VAT in the past. If you have made your payments timely, then there is a good possibility that you can work something out which will be mutually beneficial to your company and Her Majesty’s Revenue and Customs. Before you do anything, remember that you still need to file on time even if you can’t pay the taxes which are due.
Also, don’t wait until the date VAT needs to be filed to try to make arrangements. The earlier you act, the easier it will be to come up with some sort of payment arrangements. HMRC will determine if you are eligible to enter the Time to Pay scheme and if they find that you are willing but just unable to pay at the moment, there is a good chance that they will extend your payments on a monthly plan lasting up to 12 months.
If you have any amount towards that ‘hefty amount’ you owe, pay that by the due date. This will serve two very important purposes. In the first place, this will indicate that you are making a concerted effort to pay your bill and secondly, it will reduce any potential surcharges which may be added.
Time to Pay arrangements can be made by contacting HMRC and discussing your situation. Should you be reluctant to deal directly with the taxman, a licensed insolvency practitioner or a financial adviser can act on your behalf. In fact, sometimes this is the better option because they can help you analyse your projected financial health for the upcoming year. HMRC will want to know that your company is going to be viable during that period and you will have the ability to make the payments set up on the TTP plan.
Real Business Rescue insolvency specialists are on hand to help you find a solution to tax problems. We have over two decades experience dealing with companies in distress and have acted thousands of times in negotiations between HMRC and UK companies. Call us for a no-obligation consultation, free of charge. We can help you determine if Time to Pay is your best option and will give you honest and realistic advice. Just remember to call before your VAT becomes overdue!
Date: Monday 21st January, 2013
Published in: Tax HMRC Vat