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Time to Pay Agreement With HMRC

HM Revenue and Customs is the UK’s most prolific issuer of winding up petitions. If your company falls behind on its taxes and slips into arrears, it could be targeted by HMRC for compulsory liquidation.

Does your business owe money to HMRC? During tough trading times, it can be very easy for your company to slip into arrears with HM Revenue and Customs for PAYE, VAT and Corporation Tax.

For many struggling companies, HMRC is their biggest creditor, and often the most aggressive in attempting to recover what they are owed. Failing to pay HMRC could lead to a winding up petition being filed against your company.

If your business is struggling to pay its taxes, there are several options available. It can raise capital to pay HMRC and relieve any legal pressure. It can also negotiate a Time To Pay agreement to pay its tax arrears in a series of instalments.

Do you have questions about the Time To Pay agreement? Contact us to learn more about how your business can negotiate a Time To Pay agreement with HMRC to pay its tax arrears over a period of time that doesn’t affect its cash flow or solvency.

Introduction to FRP


  • What is a Time To Pay agreement?

     

    HM Revenue and Customs is the UK’s most prolific issuer of winding up petitions. If your company falls behind on its taxes and slips into arrears, it could be targeted by HMRC for compulsory liquidation.

     

    A Time To Pay agreement (also known simply as TTP) is an agreement between your company and HMRC that lets your company pay its tax arrears in a series of instalments. When successful, a TTP agreement prevents HMRC from attempting to wind up your business.

     

    Time To Pay agreements usually give your company a period of three to six months to pay its tax arrears. This allows your company to pay its tax arrears without making a single lump sum payment that could hurt cash flow.

     

    Is a Time To Pay agreement suitable for your company?

     

    HMRC reviews each Time To Pay agreement based on a several characteristics. As part of the review process, HMRC will look at your company’s viability and its cash flow, to assess whether or not a TTP agreement is likely to be a successful option.

     

    In order to enter into a TTP agreement, your company needs to have steady cash flow to be able to make regular payments of its tax arrears to HMRC. HMRC also has to be satisfied that your company is under real financial distress.

     

    Most Time To Pay agreements are made to allow your company to pay its arrears in the shortest realistic time period. TTP means that your company needs to be able to tolerate a potentially serious burden on its short term cash flow.

     

    What are the benefits of a Time To Pay agreement?

     

    Time To Pay agreements offer several advantages for your company. By reaching an agreement with HMRC directly, your company can avoid being targeted through the courts for compulsory liquidation via a winding up petition.

     

    Negotiating a TTP agreement with HMRC lets your company avoid using an alternative financing option. In many cases, a TTP  agreement is cheaper for your company, over the long term, than an emergency cash loan.

     

    Contact us to learn more about Time To Pay agreements

     

    If your company has VAT, PAYE or Corporation Tax arrears that it can’t pay due to a strain on cash flow, entering into a Time To Pay agreement could give it the financial breathing space it needs.

     

    Our business recovery experts have provided advice and assistance to hundreds of UK companies. Contact us now for a free initial meeting to learn about the Time To Pay agreement process and find out how we can help your company successfully manage its tax arrears.