Have you discovered that you are unable to pay your latest tax bill? This can seem like the end of the world for a lot of businesses. But, after recent world events, this is more common than ever before. There is no doubt that a lot of companies are struggling and this includes paying their tax bill on time.
So, is there a solution? Are you able to negotiate and come to an agreement with HMRC? Let’s find out.
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Can You Negotiate with HMRC?
It can be distressing when you know that you cannot pay your bill to HMRC. This often makes a lot of businesses panic. But, you should know that you are not alone and this happened a lot, especially during hard financial times. It is possible to negotiate with HMRC. This is something you can do yourself or with the help of a specialist tax accountant in Ruislip.
The most important thing to remember is that HMRC requires you to communicate effectively with them. The worst thing you can do is ignore correspondence with HMRC and avoid letting them know what your problems are. They are not going to be able to help you and offer possible solutions if you just ignore telling them what is going on.
In particular, you still want to complete your tax returns even if you think that you cannot pay. A lot of businesses delay this and it is a bad idea. You have to keep all forms of communication open. HMRC needs to know what your financial situation is. Hiding your financial problems does not do your business any good and it will mean that you face penalties. For example, if you are late completing your tax returns, there are going to be fines that you are eligible to pay. This is just going to create more financial troubles for you.
The Time to Pay Arrangement
A lot of people are quick to judge HMRC and believe the worst about the organisation. In other words, businesses get it into their heads that HMRC is strict and will not make any allowances for them. But, this is not necessarily true. HMRC is understanding and knows that circumstances can make it difficult for businesses to operate as they usually do. They just need to make sure that you are being honest and are having genuine problems paying.
If HMRC believes that you are being honest when you talk about problems paying your bills, they can offer a Time to Pay or TTP arrangement. Just as the name suggests, this is a beneficial scheme that is going to allow you more time to pay off your debts. It is a formal agreement that you will enter into with HMRC, which will detail instalments you have to pay. So, instead of being committed to one huge bill, you are able to pay it in more manageable instalments over around 12 months.
Every business is going to be able to get a different Time to Pay arrangement. This is going to be unique to suit your situation and to make a good proposition for you. Thus, the duration and monthly payments are going to be different for everyone. This is why it is very important to be honest during the discussions and negotiations. This will ensure you agree on an arrangement that works for you.
For example, you want to negotiate and not overcommit. While you will be grateful you are able to get a Time to Pay arrangement, you need to ensure that you agree to repayments that are realistic for you. For instance, if you end up breaking your contract and missing repayments, this will lead to the failure of the Time to Pay arrangement. In other words, you will have to pay your debts in full. This could lead to insolvency action against you.
Seek Professional Advice
So, the answer to the question is yes, you are able to negotiate with HMRC and reach a conclusion that works for you and your business. But, the key is to seek professional advice and assistance to make your life easier. It is best to work alongside a professional that knows how HMRC operates. This is going to ensure that someone with expertise can negotiate on your behalf and achieve the best results for you. They will keep communication open with HMRC, which is the key to success. You need to be open about your financial situation in order to reach a conclusion.
