“A fly move” or “there for the asking”? Find out more about HMRC’s Time To Pay Arrangements.

News reports at the end of last week questioned how Flybe were able to obtain a payment plan with HMRC. Aisling Muldoon, our Restructuring & Insolvency Manager, gives her views on the reported story and the relief available.

“Time To Pay” arrangements with HMRC have been around for a long time. The first that many of the current generation of insolvency professionals will likely have guided clients on was back in 2008/2009 at the height of the property crisis. HMRC’s Business Support Service introduced the scheme to allow taxpayers a short period of time to get their affairs back in order and to bring their tax account up to date.

Whilst the 2008/09 scheme has long since concluded, HMRC do continue to offer Time To Pay arrangements to taxpayers in genuine situations where a business, or an individual, falls behind in their payments. They do however apply strict criteria and it is certainly not a carte blanche approach where all requests are granted on the asking.

We continue to be surprised when clients come to us and haven’t been aware that HMRC can sometimes offer that much needed helpline. Just last week, we had two situations where new clients, with our help, secured breathing space by spreading their VAT arrears over 12 months.

So, when is it available? There are several steps which HMRC will work through but as a guide, you will need to be able to demonstrate the following (as a minimum):
1. Is your business viable? Can it realistically trade out of its difficulties;
2. Are your returns all up to date? Have you all VAT, PAYE (RTI) and business tax returns filed;
3. Is it one tax or several taxes which are behind? If you have more than one type of tax in arrears, it can be more difficult to secure a TTP arrangement;
4. Can you demonstrate to HMRC that you have asked your bank and/or other financial instructions for help and they are unwilling to assist?;
5. Have you had any previous TTP arrangements in place before? If so, HMRC may be reluctant to put another in place.

It is important that HMRC expect future returns to be submitted and tax liabilities to be paid as they arise. If a return is late or payment of future liabilities is missed, the TTP is automatically cancelled.

If you are behind with your tax payments, don’t leave it too late. Speak to us about how we can work with you to get a payment plan in place to get yourself or your business back on track.