Updated: 28th January 2021
Even though HMRC are quick to recover arrears of tax, VAT, and National Insurance, is it worth borrowing money specifically to pay them when there may be other alternatives available?
Getting behind with your business tax liabilities is very worrying, and does need to be addressed proactively, so what else can you do to deal with the situation? Seeking professional assistance to negotiate with HMRC is just one option when your business is struggling with debt.
Professional input from a licensed insolvency practitioner (IP) can positively influence the outcome of HMRC negotiations. In fact, simply by seeking assistance from insolvency experts you demonstrate a commitment to rectifying the situation.
HMRC know that figures presented to them by a licensed IP are reliable, and this gives them more confidence in your ability to repay the amount owed. There’s always a danger that, if you negotiate yourself, the repayment amounts won’t be sustainable which can be disastrous in the long-run.
Falling behind with a TTP will mean having to pay the arrears in full, hence the importance of negotiating payments that your business can manage, as you’ll also need to continue paying your current tax bills.
By making a few adjustments to the way you do business, and paying close attention to cash flow, you may be able to meet your obligations without having to seek further funding, or at least use the money to grow your business.
A few simple changes to existing systems and procedures can be all that it takes – for example:
Operating with a positive cash flow is crucial if your business is to stay on top of its liabilities. This can be encouraged by regular forecasting so you can see if there’s likely to be any cash shortfalls in the coming months. Getting into the habit of updating this forecast on a daily basis also gives you greater control.
By maximising your cash flow you can use any additional funding to grow the business, rather than using it up in the repayment of debt.
If you need further advice on funding your business, or help to negotiate with a creditor, call one of the team at Real Business Rescue. We’re insolvency experts and have vast experience of dealing with HMRC.
We’ll be able to put forward a feasible plan for repaying your tax arrears, and advise on the best forms of alternative finance for your business. Real Business Rescue is a major part of Begbies Traynor Group. With 100 offices across the UK, you’re never far away from expert and confidential advice.
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