HMRC – Time to Pay 

If you are considering approaching HMRC to request a deferral of tax liabilities we can help you.

How to approach

Speaking to creditors before you miss a payment is almost always the best approach to take, and that applies to HMRC too.

We always advocate early, open dialogue with stakeholders – it encourages trust and makes it more likely that creditors will be supportive.

What is a tax deferral or Time to Pay (TTP)?

A request to HMRC to pay VAT, PAYE or Corporation tax later than the deadline constitutes a tax deferral or Time to Pay request. This applies whether the deferral request is for one type of tax, e.g. VAT, or any combination of taxes.

The best chance of success

We’ve helped many company directors and management teams submit Time to Pay requests with HMRC. How you engage with them makes a huge difference to the outcome and we find we can often achieve much better outcomes than directors/business owners can themselves. HMRC knows that the involvement of a restructuring professional means two things:

  • That the situation is serious and there is a risk that the business may fail (in which case they might not recover any money). This tends to incentivise them to negotiate a repayment proposal.
  • They know that any financial forecast/proposals submitted have been vetted by an independent professional and are therefore likely to be more credible.

These advantages mean we can frequently achieve TTPs of several months – often up to twelve months and in some case even longer.

How do HMRC assess
Time to Pay requests?

We work quickly to assess your options to understand if an approach to HMRC stands a good chance of success.

What criteria do HMRC use to judge Time to Pay requests?

HMRC will request information that helps them to determine:

  • The viability of the underlying business
  • The cash support required by the business
  • Whether the proposed repayment period is reasonable and affordable
What information do HMRC ask for?

Preparing information for HMRC can be time consuming. That’s why we help you to prepare, draft and present robust information to them to address any concerns upfront. Like other creditors, HMRC will expect you to have up-to-date financial information to hand and will want to know that you’ve approached other creditors including your lender. As guardians of taxpayers’ money, they don’t like to be seen as the lender of first resort.

What powers
do HMRC have?

HMRC has a wide range of enforcement powers and, unlike other creditors, can send enforcement officers to your premises to take control of stock or equipment, without first having to go to court. HMRC also tend to be much more likely to issue Winding-Up petitions than other creditors.

These significant powers make it all the more imperative that you deal with HRMC proactively if you have arrears. The good news is that they are used to dealing with TTP requests and, if you have a reasonable past payment record, they tend to be reasonable in dealing with these.