A Time to Pay Arrangement is a payment plan entered into with HMRC allowing for tax arrears to be paid back by affordable instalments. Find out if your company qualifies today.
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Largest Creditor
HM Revenue & Customs is the largest creditor for many companies in the UK and if your company has fallen behind on its tax payments, whether it’s outstanding VAT, Corporation Tax, PAYE or NIC taxes, they will quickly alert your business and take action to recover the money.
According to recent estimates, more than 250,000 UK companies have a payment plan with HMRC to clear up arrears from unpaid or late taxes.
Winding Up Petition
Because of this HM Revenue & Customs is not slow to act, and if one of its demand letters is ignored your company could have a winding up petition issued against it.
In fact, approximately 60% of all winding up petitions in the UK are issued by HMRC against non-paying businesses.
What is a Time To Pay Arrangement?
A Time to Pay arrangement is a type of payment plan entered into with HMRC by a limited company, allowing for tax arrears to be paid back through a series of affordable monthly instalments based on the company’s income and expenditure.
They are based on the specific financial circumstances of the company, so there is no ‘standard’ Time to Pay arrangement. HMRC look at what the company can afford to pay and then use that to work out how much time the company will need to pay it.
The arrangement can last up to 36 months depending on the amount owed to HMRC.
A Time to Pay arrangement can cover all outstanding amounts overdue, including penalties and interest.
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What are the benefits of a Time to Pay?
- Immediate steps can be taken to reduce the arrears
- There is no meeting of creditors
- Affordable instalments
- Not as intrusive as a more formal insolvency
- You retain final control of the process
- Include all company tax arrears
Does your company qualify for a TTP?
Find out if you could be eligible for a TTP arrangement today with our free test.
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Professional Service
Professional ServiceOver the last decade we've helped hundreds of company directors, like you, with HMRC tax arrears. By using Forbes Burton’s specialist Time to Pay negotiation team, you will have access to our vast experience and you will enjoy the benefits of a dedicated case worker who will manage your case from start to finish.
Clears Tax Arrears
Clears Tax ArrearsLike more formal insolvency procedures, using a TTP arrangement will clear any of its outstanding tax arrears in the correct and lawful manner. An initial appraisal determines what the company is capable of paying to HMRC on a monthly basis.
Protects You As A Director
Protects You As A DirectorThe most common question we get asked is “will using a TTP affect me being a director in the future?” By using Forbes Burton you can be sure that your responsibilities are upheld at all times and the Time To Pay arrangement has no effect on you as a director.
Joanna Wilson , JTW Consultancy Limited
"I have been worry-free since Robyn Brecknock became my allocated case advisor... This was a huge relief and I would recommend Forbes Burton to any small business owner"
Frequently asked questions
When your company starts experiencing cash flow problem, payments to HMRC can often end up being pushed back in order to pay other creditors. While this can work in the short term, it often leaves your company with tax arrears.
HMRC is not required to have a County Court Judgement in order to send your company a payment notice. There is no dispute process – if HMRC notifies your company of arrears, you have arrears.
Paying taxes behind schedule can act as a warning sign for HMRC that your company could soon become insolvent – especially if your company pays taxes late several times or has had payment issues in the past.
If your business has tax arrears, it will receive a warning letter from HM Revenue & Customs alerting you about the company’s debt. Often, these warning letters provide just seven days to respond and pay the outstanding debt.
As well as potentially leading to the winding of your company, HMRC arrears may also lead to personal liability. If you know your company is insolvent but continue to trade, you could be found personally liable for your company’s debts to HMRC.
If your company does have a tax arrears problem there are a few options available to you:
HMRC offers a ‘Time To Pay’ plan. This is a way of paying the debt owed to HMRC over a certain time period. If your business has a good compliance record, this could be your best option.
Enter a Company Voluntary Arrangement to protect your company from legal action pursued by HMRC and allow your business time to work out an alternative payment plan.
Enter your company into Administration (your company is run by an external person/company) to protect yourself from legal action from HMRC
Raise funds via financing, invoice factoring or another means – in order to pay its debts to HMRC and resume operating.
Close the company down via Administrative Dissolution or Liquidation.
If your business is experiencing pressure by attempting to maintain a time to pay agreement or you are getting more pressure from HMRC then we can help.
We can provide real business solutions to your situation including:
- Forbes Burton’s specialist Time to Pay negotiation team will work with you and HMRC to come to an agreement.
- Emergency Finance to quickly cover short falls in cash flow
- Liquidation if the business has become un-recoverable and needs to sell off assets
- Restructuring if the business is still viable and just has short term financial problems
- Company Restart if the business has failed but could be successful without the debt holding it back
- Company Closure if you are wanting to walk away and there aren’t enough assets to pay for a liquidation
According to law, HMRC must keep to the arrangements except under very strict criteria. If there are any changes in your company’s circumstances which wouldn’t be supportive of the Time To Pay plan, they do have the right to withdraw.
As mentioned above, honesty is imperative and if they discover that you have falsified or misled them in any way during the application process, they can cancel the agreement as well.
If you default they can break the agreement and of course, if your situation worsens they will reassess the amount of risk. Remember, Time to Pay is for temporarily distressed companies that have the capability of future viability.
If you should be wound up by another creditor or become on the verge of being wound up, they may very well cancel their agreement.
If you don’t make the payments on the due dates or incur new arrears, HMRC can immediately terminate the arrangement and insist on all debt being paid in full immediately. If this is likely to happen, it is important to discuss this with us as soon as possible as there may still be other options.
No – as long as everything is done correctly, this is where we come in.
Yes. If you want to start again or become a director of another company this is fine.
To get started just your name, contact details and how much you are in arrears. Once you’ve sent this through will send you a short questionnaire so we can give you a full quote.
Does your company qualify for a TTP?
Find out if you could be eligible for a TTP Arrangement today...
See if my company qualifies for a TTP
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