HMRC Tax Arrears - HMRC Tax Advice

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HMRC Tax Arrears

Thousands of businesses struggle to meet their tax debt repayments every year, so if you find your business is in difficulty and you can't raise the necessary funds, don't worry; you're not alone.

If you believe that you have been charged the wrong amount in tax, you should contact the tax office that issued the payment request. HMRC debts affect a large number of businesses. Over 250,000 companies are subject to a form of payment plan, with many struggling to meet their time to pay plans. As a result, the number of approvals for time to pay deals has been steadily dropping.

Dealing with Arrears

Many businesses will ignore their tax debts and hope that they'll go away, when in reality, this is the worst course of action that you can take. HMRC tax arrears will never just go away. They need to be evaluated and dealt with in a realistic and communicative manner.

It's always advisable to plan a business cashflow prediction well in advance of tax payments. If your business' directors don't believe that the company can generate enough cash to accommodate tax obligations, alternative plans for the business can be undertaken.

Options for Businesses in HMRC Tax Arrears

Finding that your business is in HMRC tax arrears can be rectified. There are several options available to help businesses experiencing difficulties with tax arrears.

  • Ask HMRC for Time to Pay. HMRC may seem like an inflexible and daunting organisation, but this isn't always the case. HMRC will want to see any debts fully paid, so finding a compromise and date at which you can pay is often a possibility, but requires you to be helpful and communicative. In 2008, HMRC implemented a Business Payment Support Service to support business struggling due to the recession. All SME's will be able to get support with their cashflow issues and given a time to pay arrangement from HMRC.
  • Company Voluntary Arrangement (CVA). A CVA is a legally binding agreement between your company and your creditors. CVA's are a good way to improve cashflow and can also relieve pressure from tax, VAT and PAYE whilst the CVA is being prepared.
  • Administration. Administration can offer some protection to your company from the aggressive legal action from HMRC.
  • Pay off Debts. You can always pay off tax debts with any money you may have available.


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This website has been written and intended for registered limited companies in the UK only. The site contains general information and resources for limited companies only in financial trouble. Insolvency Helpline only work with limited companies to offer solutions for their business debt problems. Insolvency Helpline cannot offer help or advice any other entity except limited companies. Insolvency Helpline does not advise individuals, sole traders or partnerships seeking debt advice. If you are an individual, sole trader or partnership seeking advice, we recommend using an alternative service.

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