How to Negotiate Time to Pay for COVID-19 With HMRC & Payment Plan

Whilst tax due on 31 July 2020 by self-assessment taxpayers is now deferred for collection until 31 January 2021 due to coronavirus disruption, there has currently been no such tax deferral announced for corporation tax payments due by companies. Unless such a deferral is announced, many company directors will be forced to negotiate extra time to pay using the official scheme on offer.

This article outlines how to go about it.

When to make contact: Get in touch with HMRC as soon as difficulty making payment is expected and usually one to two weeks in advance of the due date for payment. Before making contact ensure that returns are up to date and the liability has been established.

Cash flow forecasts and budgets: Have financial forecasts and a statement of assets and liabilities available before making contact with HMRC. You will need to make an offer of what payment you can initially make and then suggest ongoing regular payments. HMRC will usually want to set up a monthly payment plan with collection by direct debit over the agreed period. Most HMRC debt management contact centre staff have the authority to agree time to pay over a period of up to 12 months, but debts larger than £100,000 may have to be referred internally within HMRC.

Agree an amount that is sustainable: If you reach a time to pay agreement with HMRC but subsequently do not honour it at any point during the agreement period, it will be very difficult to get HMRC to re-establish it. In addition, they will be more reluctant to make agreements with you in the future. Therefore if your circumstances change, contact HMRC to renegotiate the arrangements well before you miss any payments.

Expect robust questioning: HMRC staff may be more understanding in the current environment, but usually negotiating time to pay can feel quite intrusive. HMRC need to be made aware of all information which might be relevant to the payment difficulties.

Which debts to prioritise: In usual circumstances, HMRC is more willing to consider agreeing time to pay for profits based taxes such as income tax and corporation tax, than for taxes such as VAT and employees’ PAYE and national insurance contributions, which businesses are effectively collecting on behalf of the exchequer. VAT payments have already been deferred in the current environment together with self-assessment tax due on 31 July 2020.

Late payment penalties: One advantage of using the Time to Pay scheme is that late payment penalties will not be charged if the arrangement is in place when penalties arise. HMRC may now be more willing to waive late payment penalties given the current situation.

Interest: In normal circumstances HMRC does not waive interest unless the delay in making payment is directly attributable to HMRC, but this may change in the current situation.

If you need to contact HMRC, a dedicated COVID-19 helpline has been established, and the details are available here: https://www.gov.uk/government/organisations/hm-revenue-customs/contact/coronavirus-covid-19-helpline

partners@rjp.co.uk

How to get onboard with RJP

Talk to us

Have a free initial discussion with a member of the RJP team to identify ways we can enhance your business's growth with our comprehensive support and strategic advice.

Hassle-free migration

Choose RJP and we'll smoothly manage all transitions, handling paperwork, coordinating with your current accountant, and ensuring no deadlines are missed for a worry-free experience.

A pathway to growth

Finally, we will send you the required documents to sign and return, leaving you to continue leading your business, backed by our abundant, responsive advice and support.

Chancellor unveils business tax roadmap plan

Business Services, Business Tax

IHT forms get long overdue update

Personal tax

RTI reporting changes for business payroll to be postponed

Business Services, Business Tax

Here’s what our clients have to say

Hear directly from our clients about how RJP's personal, straightforward approach has made all the difference in their business and personal success.

"I just wanted to drop you a short note to say how grateful I am for the support that RJP has provided over the past 4 weeks while our Financial Controller was away. I struggle to comprehend how much work your staff get through during their weekly visits and they are always a pleasure to have around the office."

"I wanted to write and express our gratitude for your help and hard work in getting Probate through and settling all the taxes. I am so pleased that we selected RJP, as your professional help and updates throughout this process have been invaluable. If at any time in the future Probate assessment may be needed, you will be our first port of call. Once again, many thanks to the whole team."

"I would like to take this opportunity to thank you very much for the amazing job you have done navigating us through this whole process. My family and I also really appreciate the care and compassion demonstrated by you and your team in every dealing. Our thanks to everyone."

"Just a quick e-mail from me to thank you for achieving the target for producing the draft accounts – it is very much appreciated and gives a first class impression of your firm. Many thanks."

"RJP provide our company with a complete service which takes the stress and strain away from the day to day running of our accounts! Their understanding of our business and their patience and advice is invaluable."

Get the latest tax tips to your inbox every month

FAQs

At RJP, we understand that keeping a finger on the pulse of your business's health is crucial. That's why we offer management reporting services—think of them as a regular health check for your company. These insights show you the real-time performance of your business, helping you make informed decisions to nurture and grow your enterprise.

We love seeing your business flourish! Growth and improvement are at the heart of our practical advice. From the ins and outs of everyday operations to big-picture strategic moves, we're here to offer clear, actionable steps that can propel your business forward.

We know dealing with the issue of compliance and auditing can be less than thrilling. That's exactly why we're here—to handle the complex stuff so you don't have to. We offer comprehensive compliance services, ensuring everything is up-to-date without you having to wade through a sea of regulations.

Absolutely! There's a world of opportunity out there to support your business financially, and we're well-equipped to be your guide. We can help you understand and access HMRC’s tax relief schemes that are relevant to you and your business, making sure you're not missing out on any potential benefits.

When you need us, we're just a call or an email away—no question is too small or too large. We're known for our quick responses and our fixed fees mean you can reach out without worrying about unexpected costs. Plus, we always keep things simple and straight to the point. We're not just your accountants; we're part of your team, ready to support both your business and personal needs.