Turnaround & Rescue

HMRC Negotiations

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Tax arrears to HMRC

If you are in tax arrears to HMRC, then it is possible to enter informal negotiations with the taxman outside of the standard Time To Pay procedure. A formal repayment plan isn’t always required, however we understand that it can be daunting to speak to HMRC regarding money that you owe.

Our experts can help you through the entire process. Whether you would like us to educate you on the process and what you can expect, or if you would like us to speak to HMRC on your behalf, we can help to negotiate with the taxman to establish an arrears repayment plan that works with only what you can afford.

Security Bond

What is a HMRC security bond?

A security bond is almost like a deposit that a phoenix company is asked to pay to HMRC to protect them should that business be unable to keep up with its tax responsibilities. If, in the future, that company is unable to pay the tax that it owes, then HMRC will use the security bond to pay the outstanding balance.

Why have I been asked for a security bond?

If HMRC ask you for a security bond, you will receive a Notice of Requirement. This will provide details on how much you need to pay and when the payment needs to be made. If you are a start-up company, then you are unlikely to receive a request for a security bond; they are usually only requested if HMRC has a strong belief that you will not be able to keep on top of your tax responsibilities.

If you or another director setting up a company has been part of a previous company that was liquidated or sold through administration, especially if HMRC are a significantly large creditor in comparison to other creditors, then you are more likely to be asked to provide a security bond.

How much will I have to pay?

The amount required to pay will vary from business to business. However, HMRC will typically look at any previous companies you have been associated with and calculate between 4 and 6 months anticipated Crown liability.

Once you receive a Notice of Requirement, you are required to respond and pay by law.

Can a HMRC security bond be negotiated?

Yes, there is absolutely an option for negotiating with HMRC with regards to the security bond requested. If you have been asked for a security bond it is important to take proper professional advice from someone experienced in dealing with HMRC negotiations. At ICS, we can either assist directly or alternatively we have a number of relationships with firms who specialise in this area.

What success has ICS had negotiating with HMRC on security bonds?

ICS were approached by a company that had received a request from HMRC for a security bond of £450,000. We were able to successfully negotiate with the relevant Fraud and Investigation department at HMRC for the security bond to be reduced to £30,000.

As the deadline loomed for the company to pay the agreed £30,000 security bond to HMRC it became apparent that the company did not have sufficient funds to pay this in full. We therefore entered into further negotiations with HMRC and were able to agree a Time to Pay arrangement with HMRC in respect of the security bond, thereby allowing the company a further three months to pay the security bond to HMRC in full.

Through securing a reduction in the security bond amount of some £420,000 and by negotiating additional time for the company to pay the revised £30,000 security bond required over three months, this ensured the viability of the company moving forwards. Without this expert advice and assistance, the company would not have been able to continue to trade and would have had to close. Through the hard work and dedication of ICS’ specialist team, the company was able to continue trading, safeguarding some 40 jobs.

If you have received a Notice of Requirement or anticipate that you will have to pay a security bond to HMRC, it’s important that you seek expert guidance as soon as possible.

The professionals at ICS can provide advice and can help you navigate this new terrain. We have a proven track record of success when it comes to negotiating repayment plans and security bond payments with HMRC and we can help establish a solution that is best for you.

Visit our contact us page and fill in the form to get in touch or give our team a call on 0800 731 2466.

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