Updated: 16th March 2021
The devastating economic consequences of the coronavirus pandemic have led the government to introduce new initiatives to support UK businesses, and prevent entire industries from collapsing.
Although HMRC’s Time to Pay (TTP) arrangement isn’t a new initiative, it is helping businesses in financial distress to pay off tax arrears over time and manage their cash flow more effectively.
If your business can’t pay PAYE because of coronavirus, however, it’s important to take action quickly to prevent the situation from worsening.
HMRC’s time to pay scheme allows businesses in short-term or unexpected financial difficulty to pay their overdue tax liabilities over an extended period. This is typically between two and six months, but due to the crippling effects of the pandemic, the tax body may be more willing to offer more time to pay.
One key point about a Time to Pay arrangement, however, is that your situation could worsen quickly and drastically if you fail to keep up the new repayment schedule.
It’s imperative to assess how much you can afford to pay to HMRC under the new arrangement so you avoid overstretching your finances - particularly so when dealing with these uncertain economic circumstances.
HMRC has set up a specific coronavirus helpline with staff trained to carry out negotiations, but before you phone it’s important to understand a little about their system and the information they will need to make a decision.
When you don’t have sufficient working capital to pay your PAYE liability or other bills, obtaining professional advice gives you a clearer picture of the overall situation. Sometimes, when you’re in the middle of a crisis your view can be too subjective, which is why professional insight helps.
A licensed insolvency practitioner (IP) can prepare the necessary evidence to support an application under the Time to Pay scheme, and conduct the delicate negotiations on your behalf.
If a Time to Pay arrangement continues to be rejected, however, or isn’t suitable for your business, is there anything else you can do?
Company Voluntary Arrangement (CVA)
A Company Voluntary Arrangement an official insolvency measure that could help your business deal with PAYE arrears. It involves negotiating with multiple creditors so they receive an amount towards their debt each month – an agreement that typically lasts for five years.
If you would like more information on dealing with PAYE arrears or other financial difficulties caused by the coronavirus crisis, please contact one of our partner-led team. Real Business Rescue has extensive experience of negotiating with HMRC, and can contact them on your behalf. Please get in touch to arrange a free same-day consultation.
28th July 2021
The number of UK companies in positions of ‘significant financial distress’ were up 24 per cent at the end of the June 2021, as compared to the same point of last year.Read More
22nd July 2021
The Confederation of British Industry (CBI) has called for an “immediate rethink on self-isolation rules” to help businesses manage their workforces as the economy reopens and recovers.Read More