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Late VAT payment - will HMRC consider a 'Time to Pay' arrangement?

Question

I have £20,000 VAT bill and a tax liability to pay, of which I don’t know the full amount, but I’m already struggling with the VAT. I have accumulated around £11,000 but need to negotiate time to pay with HMRC to allow me to get back on my feet and get the rest together.

I don’t have assets in the company except a fairly new work van, but I need that to make my living. My accountant says it’s unlikely I’ll be given time to pay and that HMRC bailiffs will soon be round for my van which isn’t what I wanted to hear. I need some solid advice.

Answer

If you don’t have any history of arrears or non-compliance with HMRC, it is actually very likely that they will be willing to agree a time to pay (“TTP”) arrangement with you. HMRC will want to see evidence that you will be able to maintain payment of current liabilities as well as paying the historic debt, so it is important to provide future cash flow forecasts at the time the proposal is made.  

If this is not something you feel comfortable with, we have extensive experience of negotiating with HMRC and can assist you in navigating the process. You should bear in mind that once a TTP is agreed, any failure to make payment under the arrangement, along with any current HMRC debt, will constitute automatic default of the TTP. 

Advice You Can Trust

Insolvency Practitioners Association Institute of Chartered Accountants in England and Wales R3: Association of Business Recovery Professionals ICAEW Business Advice Service Turnaround Management Association ACCA (the Association of Chartered Certified Accountants) ICAS | The Institute of Chartered Accountants of Scotland
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