HMRC Time to Pay / COVID Experiences?
Discussion
What are your experiences with HMRC and Time To Pay for VAT/CT/PAYE debts accrued over COVID?
We haven't paid any VAT quarters during COVID due to COVID related supply chain issues. No Stock = No Sales and therefore no money to pay the VAT. It's been awful for the business. We source all of our stock from the Far East. I've also been suffering from depression and anxiety, lost a lot of staff through COVID and life isn't going too well.
With the pause on winding up due to end 30th September. Shortly I'm going to file all of the VAT Returns outstanding so HMRC have a clear picture of what we owe (Circa £170,000).
Our supply chain issue's are slowly improving, and 75% of our profits come from Christmas, so we do have a windfall of cash coming in Nov-Dec. But I am terrified that they will try and wind me up moments before our crucial trading period when the money comes in.
We've been trading 10 years, t/o £2m. Never been late with HMRC until COVID. What are the chances of them giving me 2 years (£7k/month) to clear the debt or am I in lala land?
We haven't paid any VAT quarters during COVID due to COVID related supply chain issues. No Stock = No Sales and therefore no money to pay the VAT. It's been awful for the business. We source all of our stock from the Far East. I've also been suffering from depression and anxiety, lost a lot of staff through COVID and life isn't going too well.
With the pause on winding up due to end 30th September. Shortly I'm going to file all of the VAT Returns outstanding so HMRC have a clear picture of what we owe (Circa £170,000).
Our supply chain issue's are slowly improving, and 75% of our profits come from Christmas, so we do have a windfall of cash coming in Nov-Dec. But I am terrified that they will try and wind me up moments before our crucial trading period when the money comes in.
We've been trading 10 years, t/o £2m. Never been late with HMRC until COVID. What are the chances of them giving me 2 years (£7k/month) to clear the debt or am I in lala land?
They're being supportive and your liability really isn't that much in the scheme of things. You'll be dealing at the simpler end of the scale with the telephone team at that size and they're generally minded to say yes so long as you propose something sensible (time wise).
Do get your returns up to date and do complete them on time in future.
You can only negotiate existing liabilities, not future, so make sure you're expecting to be able to pay future quarters on time - and don't forget about PAYE either.
2 years may be a stretch for the telephone team - 12 months should be easy - but communicate with them as soon as possible - otherwise you're not giving them any choice. Pull together a simple business plan, including cash flow, that you're prepared to send to them - setting out what's caused the problem, what you've done about it, verifying what alternative sources of funding you've been pursuing (increased bank facilities, any COVID loan support, shareholders loans, stretched terms with suppliers or if not why not), confirming no dividends or other drawings have been taken over the period etc. so you get on the front foot with the answers to the questions they will ask.
Do get your returns up to date and do complete them on time in future.
You can only negotiate existing liabilities, not future, so make sure you're expecting to be able to pay future quarters on time - and don't forget about PAYE either.
2 years may be a stretch for the telephone team - 12 months should be easy - but communicate with them as soon as possible - otherwise you're not giving them any choice. Pull together a simple business plan, including cash flow, that you're prepared to send to them - setting out what's caused the problem, what you've done about it, verifying what alternative sources of funding you've been pursuing (increased bank facilities, any COVID loan support, shareholders loans, stretched terms with suppliers or if not why not), confirming no dividends or other drawings have been taken over the period etc. so you get on the front foot with the answers to the questions they will ask.
cheekymeerkat said:
No Stock = No Sales and therefore no money to pay the VAT. It's been awful for the business.
We've been trading 10 years, t/o £2m.
I'm making bugger all too at the moment, but I always treated VAT as HMRC's money not mine (as that is what it is). Surely if you've dipped into the VAT money to keep going then there are bigger problems at play here?We've been trading 10 years, t/o £2m.
T/O means nothing, it's profit that matters.
In any case, no point asking on here, get on the blower to HMRC and fully explain the situation. Good luck
In 2010 we owed them £60k and oddly the debt enforcement guy was the only one who was helpful, the office and phone lines were not, in fact they were downright unhelpful . They agreed £5k pm and stuck to it. we paid some interest but it was not a lot.
His words to me were " we just want money" and if they think you can do it and will stick to it, I'd reckon they'd take the £7k per month.
The only thing he was clear on was that spread out over a longer time, they saw a fall off in recovery and 2 yrs may be in that category, I have no idea.
Despite how it appears, the £170k will be analysed and I'd prepare for a visit before they agree, also based on £2m , it seems like more than 1 or 2 quarters, they are very binary and if there is an anomaly they get spooked and start enquiring.
His words to me were " we just want money" and if they think you can do it and will stick to it, I'd reckon they'd take the £7k per month.
The only thing he was clear on was that spread out over a longer time, they saw a fall off in recovery and 2 yrs may be in that category, I have no idea.
Despite how it appears, the £170k will be analysed and I'd prepare for a visit before they agree, also based on £2m , it seems like more than 1 or 2 quarters, they are very binary and if there is an anomaly they get spooked and start enquiring.
100% phone them and ask what your options are. When I spoke to them they certainly seem to be happy to help out as much as they can. It is very much case by case which is a good thing! You discuss everything with them and what you can pay and they then take this "case" to a manager or some sort to have it approved.
Call them today
Call them today
Thanks for your replies.
Just giving you an update - and perhaps some helpful information for anybody else in the same situation.
I rang the Time to Pay line on Monday and they told me the account is no where near enforcement stage.
I'm in the middle of filing the outstanding returns, so could not set up a payment plan there and then, however they advised to call back in 7 days after filing the VAT returns. I asked if in his experience, an 18 month payment plan would be a reasonable request and he agreed it was not unreasonable. He did say the agent may try and bend me to take 12 months but it's not a huge problem if it's 18 months.
Just giving you an update - and perhaps some helpful information for anybody else in the same situation.
I rang the Time to Pay line on Monday and they told me the account is no where near enforcement stage.
I'm in the middle of filing the outstanding returns, so could not set up a payment plan there and then, however they advised to call back in 7 days after filing the VAT returns. I asked if in his experience, an 18 month payment plan would be a reasonable request and he agreed it was not unreasonable. He did say the agent may try and bend me to take 12 months but it's not a huge problem if it's 18 months.
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