If you owe tax and are unable to pay HMRC, your options include contacting the HMRC Debt Management and Banking Department to try and set up an affordable tax payment plan.

Before contacting HM Revenue & Customs, , whether your debts relate to the most common issue of owing VAT to HMRC or any other business tax, it is always advisable to speak to an expert advisor who understands how HMRC’s ‘time to pay’ process works and has experience dealing with companies in your position.

Over the last 12 months, we’ve negotiated over £2,000,000.00 of debt management arrangements for clients with HMRC and are amongst the UK’s most experienced HMRC mediators. 

HMRC

HMRC Debt Management

HMRC Debt Management is part of the Department for Work and Pensions (DWP)

Part of their remit is also to deal with creating payment plans for businesses seeking time to pay (ttp).

HMRC Debt Management Contact Number

The HMRC Debt Management helpline phone number is 0300 200 3887.

Opening times:
8am to 8pm, Monday to Friday.

HMRC also have ‘Agent Dedicated Lines’, for those who wish to discuss PAYE, Self Assessment, VAT or tax credit queries and are authorised as either a tax agent, or a tax adviser for their clients. You can find out more by clicking here.

‘Time to Pay’ Arrangements (TTP)

Another way to pay the whole amount demanded is known as a ‘Time to Pay’ Arrangement. These are monthly instalments, typically over a period of 12 months. As well as making these payments, all other taxes must be paid when they are due or the HMRC time to pay arrangement will go into default.

If there is a default during this time, HMRC is likely to lose confidence in the company’s ability to make future payments, and this will severely dent your chances of reaching a further agreement to settle the debt. For this reason, it is essential you take time and seek advice when proposing the initial arrangement to ensure the monthly payments are an amount you can realistically afford.

HMRC Vat Debt

We are specialists at helping companies with outstanding VAT payments to HMRC which they can’t meet. If you’re late with your VAT and in arrears, we would suggest you contact us as soon as possible to avoid any escalation of your situation.

What if an Agreement Can’t be Reached?

If you are an unable to reach an agreement, then the debt management department are likely to ask you some questions about your personal finance situation to determine whether you can’t settle the debt, or simply won’t settle the debt.

They will want to satisfy themselves that you are making an honest attempt to clear the debt and are not withholding funds for other things. A debt management officer will be appointed to handle your case and will challenge any expenditure that seems to be unnecessary.

What Options are there?

Should I Consider Debt Consolidation?

Debt consolidation generally means taking out a new loan to cover your existing debts, therefore simplifying your repayment process. It helps to reduce interest on debts but it needs to be done strategically and with a clear understanding of the fine print of both your new and existing loans, to avoid making your situation worse.

Should I Arrange a Debt Management Plan?

debt management plan is a formal arrangement between you and your creditors so that you can pay off your debts.They are less protective than Individual Voluntary Arrangements, for examples, because creditors can still take legal action during this process.

HMRC Enforcement

If HMRC decides that an agreement to pay the tax debt cannot be reached, or you ignore the debt entirely, HMRC will take ‘enforcement action’ to collect the money. This could be in the form of:

  • Collecting the tax you owe through your earnings or pension
  • Asking a debt collection agency to collect the tax
  • Removing and selling possessions to recover the loss
  • Taking money directly from a bank or building society account
  • Taking you to court
  • Closing down your business

Clearly, you must do everything you can to avoid enforcement action. That starts by contacting HMRC as soon as payment has been missed, or before the payment deadline if you know you’re going to be unable to pay. Enforcement action costs HMRC money, so it will be avoided if HMRC feels it has a realistic chance of collecting the debt due. Many company directors feel anxious about talking to HMRC about tax, but delaying the call in the hope that things will improve is likely to make matters worse.    

Free Advice

If you have any questions at all about your best course of action when dealing with the DMB, please do use our live chat, or pick up the telephone. We offer a free, confidential phone call to anyone struggling with company debt, and have particular experience with HMRC and tax arrears. Call 0800 074 6757 now.