Negotiating with HMRC
Paying debts to HMRC, whether VAT, PAYE, Corporation Tax, on time is essential for every business and failure to do so will quickly result in actions being taken against the business.
This is not a “head in the sand” moment. It is essential that you take action immedaitely. Failure to do so can effect your ability to make any negotiations with HMRC difficult and can also result in penalty fines and interest charged.
For example if still before your VAT payment due date then you should call their Business Support Line and talk to them. Don’t think there are any “soft” options, you will need to be very detailed about the cash flow issue you have and how you can make good the monies due. Failure to do so will only result in legal action being taken against the business. If this is not the first time VAT has been late then do not expect much help unless you can demonstrate extraordinary circumstances for this repeat issue.
HMRC Business Payment Support Service
Telephone: 0300 200 3835
Monday to Friday, 8am to 8pm
Saturday and Sunday, 8am to 4pm
If you have missed the payment deadline and have already received a letter from HMRC threatening legal action then you must contact that HMRC office.
We cannot say it any clearer about contacting HMRC as they state on their own website
Before you contact HMRC
You’ll need to know:
your reference number (for example, your 10-digit Unique Taxpayer Reference or VAT reference number)
the amount of the tax bill you’re finding it difficult to pay and the reasons why
what you’ve done to try to get the money to pay the bill
how much you can pay immediately and how long you may need to pay the rest
your bank account details
What happens when you contact HMRC
HM Revenue and Customs (HMRC) will ask you about:
your income and expenditure
your assets, like savings and investments
what you’re doing to get your tax payments back in order
HMRC will decide whether you should be able to pay immediately. If you cannot, they’ll decide whether you’ll be able to get your payments back on track with more time.
You’ll be asked more in-depth questions if you’ve been given more time to pay before. In more complex cases HMRC may ask for evidence before they make a decision.
The positive news is that HMRC may allow you time to pay your debt, also known as TTP (Time To Pay) Agreement.
If agreed HMRC will assess what you can pay now and then how much over what period of time, usually by Direct Debit on dates agreed. You will be liable to interest on the late payments.
If you agree a TTP Agreement then you must keep those payments up to date otherwise it is likely it will be cancelled and immediate legal action issued.
But you are not alone. We have helped many businesses with cash flow issues and have helped them prepare their case for for negotiating with HMRC. It is a “negotiation” and asking for 12 months to pay you may get offered only 6. This is where we have experience on how to negotiate that could help you greatly. Please contact us for a confidential and no obligation discussion.