If you find your company is unable to make a tax payment in full when it becomes due, it is essential you contact HMRC to make a payment proposal (known as a Time to Pay arrangement) immediately.

If you fail to contact HMRC within 30 days of payment being due, the likelihood of receiving a penalty is greatly increased.

HMRC spots late payers quickly, so it makes it all the more important to contact HMRC as soon you know there is a problem. Preferably, this will be before the tax payment deadline. Do so, and the case for your payment proposal will be strengthened, and financial penalties will be avoided.

Putting a Time to Pay Proposal Together

If you want to make a Time to Pay arrangement with HMRC, it is essential you put the strongest possible case together. To do this, the proposal must be realistic regarding what you can afford to pay, and the timeframe in which you propose to pay it. This should be backed up by evidence which includes:

  • A plan of how you will cut costs to free up the extra cash;
  • Sales and cash-flow forecasts for at least the next six months;
  • Your determination to keep up with the repayments.

Contacting HMRC to ask for Time to Pay

Once you have put the payment proposal together, it is then time to contact HMRC. It is advisable to work with an insolvency expert to help create your initial proposal and negotiate with HMRC on your behalf, as this will give you the greatest chance of success.

The best way to contact HMRC is to call the Business Payment Support Service on 0300 200 3835, as telephone contact will enable HMRC to make a decision quickly. At this point, you will be advised by an interviewer of your rights and the potential penalties that may apply if you don’t keep to the arrangement, or if you falsify any of the information you provide.

Making a Decision

HMRC will only agree to a payment proposal if it is convinced your company lacks the ability to pay its taxes on time and is satisfied the proposal is reasonable regarding what the company can afford to pay. HMRC’s decision whether to accept your payment proposal is risk based, so if it believes your proposal carries a greater amount of risk, the interviewer may ask for further information before reaching a decision. If HMRC accepts your proposal, then the Time to Pay arrangement will start immediately.

Need Advice about HMRC Payment Plans?

If you would like to talk to someone about HMRC Tax Problems, call us on 0800 074 6757 for free, confidential advice, or use the live chat function below.

Read more about HMRC Tax Problems