The Government is doing everything it can to ensure that businesses and the self-employed receive the support they so desperately need in these troubled times.
Firstly, they are allowing the deferral of VAT for three months and Income Tax payments, due in July 2020 (under self-assessment), may be deferred until January 2021.
In addition, HMRC are increasing the size of its team, dealing with Time to Pay arrangements, allowing struggling businesses the additional time required to pay their corporation tax, PAYE and any VAT which is not covered by the above deferral. A dedicated Covid-19 helpline has been set up by HMRC and you may be able to agree a bespoke Time to Pay arrangement.
Time to Pay arrangements
Time to Pay arrangements have been around for several years and were initially designed to help primarily good businesses trade out of temporary cash flow problems, by allowing their tax liability to be paid over a longer period of time (usually 6 months or less) thereby providing the vital breathing space needed.
If an arrangement can be reached with HMRC it is essential that the terms are adhered to. If not, they could cancel in which case the whole debt will become immediately payable with the possibility of penalties being added too.
Applying to HMRC
In order to make a Time to Pay application you are usually required to submit a robust business case evidenced by profit and cash flow forecasts, detailing how and when the repayments will be met. Obviously, HMRC will want their money repaid over the shortest time possible but you do not want to over commit as default puts you in a precarious position and may lead to a statutory demand being issued against your business.
Whilst you can apply yourself, negotiations can be time consuming and difficult and you are often best contacting a professional such as an Insolvency Practitioner to negotiate for you.
If your company is experiencing financial problems, as a result of Covid-19, get in touch to discuss your current situation and the options available including Time to Pay arrangements. Our skilled and experienced team of Insolvency Practitioners will help you find a solution.
Please call us now on 0330 159 8080 for a FREE initial consultation.