PAYE tax needs to be paid monthly or for the smaller business quarterly. The HMRC may conclude from failure to make payments that the company is insolvent. This can be a significant sum if the business employs many staff and the arrears cover two or more payments. Failure to discuss this with the HMRC will result in them adopting a standard process for recovery of the debt and will be more formal than most suppliers.
So how should one deal with PAYE Tax Arrears:
Discuss with the HMRC – and seek time to repay. If you had a problem paying this month what will change over the coming months. In most cases a serious review of the situation is required and plans need to be made and implemented.
It may require a more significant change – seek a Company Voluntary Arrangement; talk to an insolvency practitioner and move into Administration or into Receivership. Every case will be different – to get guidance on the options call one of our advisers and discuss the specific situation.
To some extent this arrears is a call to action and give the focus to a proper review. Ignoring the issue is not appropriate – sometimes this month or quarter’s problem can be avoided but often this is just the prelude to further defaults in PAYE Tax – so it is sensible to discuss with an adviser as soon as practical. Without doubt time is of the essence and the earlier discussions the earlier problems are addressed and solutions implemented.