Time to Pay
A Quick Reference Guide for Accountants: Time to Pay Arrangements
HMRC is getting tougher on tax. For any of your clients that are experiencing difficult trading conditions and facing growing tax problems negotiating a Time to Pay (TTP) arrangement with HMRC can hel ...

HMRC is getting tougher on tax. For any of your clients that are experiencing difficult trading conditions and facing growing tax problems negotiating a Time to Pay (TTP) arrangement with HMRC can help.

TTP arrangements help thousands of businesses who are struggling to meet their tax bills to clear these debts and continue trading. Even businesses that have had TTP arrangements in the past can still apply for a new TTP arrangement, as long as there was no default on the original terms and the business has had a good compliance and payment history with HMRC prior to the current tax arrears.
With the right guidance, you can help them put a stop to HMRC debt recovery procedures and agree on a realistic payment plan that will help to clear tax arrears.

Principles & Guidelines of Time to Pay

  • HMRC will not reduce the total amount of taxes due when a TTP arrangement is made.
  • All returns will need to be up-to-date and all future returns must be filed on time.
  • HMRC needs to be satisfied that the applicant is genuinely unable to pay their taxes on time and that the business has explored, but been unable to find, alternative source of funding.
  • The viability of a business must be demonstrated
  • Your clients must make a reasonable proposal in terms of what they can afford over a specific time period. HMRC will review previous accounts to ensure proposals are realistic
  • Plans must show that money isn’t being used elsewhere i.e. for expansion or investment purposes.
  • Proposals must show that instalments are to be over the shortest time period reasonably possible – usually within 12 months.
  • By entering into a Time to Pay agreement in advance of the due date for VAT and income tax, and adhering to the terms of the agreement, your client can avoid VAT late payments penalties and PAYE, income or corporation tax late payment penalties.
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