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Venturn HMRC Top Tips on dealing with Time to Pay
Cash flow issues.

It has to be said that dealing with HMRC is a fairly mixed and random experience.

HMRC Top Tips on dealing with Time to Pay Cash flow issues

However, there are some things that can be done to make things more predictable and therefore retain control.

In November 2008, HMRC in the UK started to give unprecedented amounts of leniency to companies who were struggling with cash flow under a programme called the Business Payment Support Service (BPSS) (see our article "HMRC Time to Pay arrangements" for more information). It’s generally agreed amongst the turnaround community that the BPSS ended in November 2009. Since that time, it’s been much more difficult to obtain and agree a Time to Pay (TTP) arrangement. HMRC are notoriously difficult to deal with and your experience varies according to who you manage to get to speak to. There are however, many things that can be done to increase your chances of obtaining either your first TTP, or re-negotiating
an existing TTP.

  • Tip 1: Find out who you are talking to, get there name, telephone number, and then write to them confirming the content of the conversation and also what you agreed. HMRC’s record keeping isn’t all that it ought to be. You’re likely to deal with up to 3 different offices during the life of a TTP arrangement, and they can’t always see the information about your previous conversations. Therefore, if you keep good records, it will demonstrate to them that you’ve been upholding your end of the bargin and it’s actually HMRC who keep moving goal posts.
  • Tip 2: You must talk fluently about your business issues and ensure that the story stacks up. They are going to want to hear that you’re doing something about the root causes of your cash flow issues. If you give the message that it’s simply trading conditions and they are the only creditor who is not being paid, then they are not likely to agree to your plans.
  • Tip 3: You must make them an offer. You should have your proposed payment plan ready and you need to be sure that you can stick to it. If possible, promise to pay them some cash now, and then make sure that you do it. This always helps to sweeten a deal. They may of course ask for more than you offered, so having 1 or 2 different proposals is usually sensible.
  • Tip 4: Underpin your proposed payment plan with a cash flow forecast. The key point here is that you need to demonstrate that you are paying what you can afford to pay. Not too much – you need to be sure that you can meet the proposed payments, and not too little – if you show a growing cash balance, HMRC are likely to ask for more money.
  • Tip 5: If you can’t meet your agreed payment plan, tell them and start the process again but make sure that your story is stronger, and that the information that you provide is more robust. If you didn’t provide a cash flow forecast initially, make sure that you do if you need a negotiate a revision.
  • Tip 6: Always submit your PAYE/NI and VAT returns. Even if you know that you can’t make the payments, you will be in a much better position if you submit your returns and HMRC know what you’re your liability is. If you don’t submit your returns, this will make the situation much worse.

Further reading

Stephen Moon, Venturn Ltd. September 2010

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