HMRC Time To Pay (TTP) Arrangements
HMRC time to pay arrangement was formalised during 2008 in recession times to allow businesses to make an agreement to pay overdue debts to HMRC within an agreed timescale, for example over 3, 6, or 12 months. Also known as TTP, this arrangement could save your business if you are experiencing cash flow problems. It can cover overdue amounts due to PAYE, VAT and Corporation Tax.
Key Points of the HMRC Time To Pay Arrangement
- For outstanding taxes
- Only for businesses likely to survive
- Can avoid penalties and enforcement action
- Typically 3 to 12 months
- Explain reasons why there is a current problem
- Explain why this will not be a problem again in the future
- Act as early as possible
The time to pay agreement is not a quick fix by any means and will only be allowed by HMRC if they think you will be able to meet the terms of the payment agreement and also any current or ongoing liabilities. It was made more formal to allow businesses to survive when having cash flow difficulties, not if they are insolvent. If HMRC believe you may be going bust then they are unlikely to enter into a time to pay agreement.
HMRC preference is to discuss your issues over the phone and it is important that your are honest about your situation, and positive that any agreement will allow your business to survive and be able to keep future liabilities up to date.
We can help you in applying for a time to pay agreement and as independent consultants provide detailed analysis of the chances of your business survival and document the reasons for the current cash flow problem and how it will be resolved going forward.
Interest is charged on overdue amounts but contacting HMRC as early as possible will greatly reduce the chances of additional penalties being imposed.
Once a time to pay agreement is offered it is essential that you keep to the agreed payment plan.