Owe Money To The HMRC?

Did you know...
Clark Oliver can help you negotiate a Time to Pay arrangement with HMRC.

With the best will in the world, businesses sometimes fall behind with their tax, National Insurance or PAYE commitments. Whilst this may only be a temporary problem from your point of view, it could lead to HMRC believing your business to be at risk of insolvency.

Money owed to HMRC should always be dealt with as a priority, even if you have other debts. HMRC won’t hesitate to start the legal ball rolling – and you could find yourself hit with a winding-up petition if you don’t act quickly.

Luckily, it’s often possible to agree a Time to Pay (TTP) arrangement, which gives you some breathing space to deal with late payments and arrears. However, you’ll need to show that you have enough cash coming into your business to enable you to keep up with the TTP repayment schedule.

Received A Statutory Demand or Winding-Up Petition From HMRC?

Act now! The sooner you tackle the situation, the better the chances of rescuing your business and preventing legal action that could lead to liquidation. Furthermore, you could be held personally liable for your company’s unpaid debts to HMRC if your circumstances involve potential or actual insolvency. The same applies to personal income tax and National Insurance Contribution (NIC) arrears (see below).

Dealing with HMRC isn’t always straightforward, so ask Clark Oliver to help. We have years of experience of successfully negotiating TTP arrangements and other options with HMRC that mitigate the risk of statutory demands and winding-up petitions being issued.

How to Tackle HMRC Debts & Arrears

We can suggest several courses of action if you owe money to HMRC. These are:

1. Contact HMRC yourself and ask them to consider a TTP arrangement, so you have extra time to pay off your arrears. You’ll be expected to give a valid reason why you’ve fallen behind with your payments, such a key client going out of business, and what you’ve done about your arrears to date. HMRC will also assess your ability to repay your debt by asking how much money you’re expecting the business to earn and how long it might take you to clear the amount owed.

2. Instruct Clark Oliver to negotiate with HMRC for you. This takes some of the stress away and makes your request for leniency more likely to succeed, as we have years of experience of dealing with HMRC and understand how they operate. We’re proud of our track record of positive TTP outcomes. What’s more, we’re Licensed Insolvency Practitioners so we can help you avoid further action from HMRC such as a winding-up petition or penalty charges.

3. Raising business finance is a third option for you to consider. Your company could have equipment such as machinery, or vehicles and property, that can be used as security against a loan. Invoice factoring is another possibility, where you’re advanced the money you’re owed by clients before payment is due. Through our relationships with specialist firms, Clark Oliver can assist with either of these options.

4. A Company Voluntary Arrangement (CVA), if you owe more than £15,000 in unsecured debts to multiple lenders. This is a formal agreement that’s a type of insolvency, but avoids actual liquidation so your business can stay open. With a CVA, you liaise with each of your creditors to agree an amount you can afford to repay each month for a set time period, usually 60 months. Your debts will need to be settled in full. If you decide this is the right solution, Clark Oliver can set up and manage your CVA.

5. Other options you may wish to consider also involve becoming insolvent, for example, putting your business into Company Administration. This means appointing a Licensed Insolvency Practitioner such as Clark Oliver to restructure the business so it can keep on trading. It’s not cheap, but it may enable you to keep hold of your assets and client contracts.