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The implications of HMRC debt are serious

Date Added: 05/01/2016  

One of the things we see again and again when we work with clients to help them deal with HMRC debt is that they often put off facing up to their situation. This is natural human behaviour – when faced with what seems like an insurmountable problem it seems easier to put it to one side and deal with it ‘tomorrow’.

However, ignoring HMRC debt will usually make your situation worse and can eventually lead to compulsory liquidation, so we recommend pulling your head out of the sand immediately!
 
Whether you’re in this position because of a reduction in sales, client loss, business debts or increased costs and overheads, or perhaps due to a combination of business challenges, the important thing is to tackle the problem head on and take action straight away.
 
If you haven’t taken action yet, do it now!
 
The first thing you need to do, if you haven’t already, is to talk to HMRC. It helps if you have a good understanding of your position and what your options are when you speak to HMRC, so you may want to read our free HMRC Debt Guide. If you’re worried about talking to the tax people, or you don’t know what to say, that is where it can be helpful to engage the services of a professional business recovery service such as 4R Business Recovery.
 
How can you get more time to pay your HMRC debt?
 
If you need to pay your HMRC debt over 12 months – whether it’s VAT, PAYE or Corporation Tax – then it should be possible to arrange this, as long as you are able to meet your ongoing tax liabilities.
 
 
If you can’t pay your HMRC debt, what are your options?

If you’re unable to pay, then are several options open to you and your business:

1.    Borrow more cash – you can raise funding using your business assets as security (we do NOT recommend taking on personal borrowing to pay off business debts).
2.    Restructure the business
3.    Enter into a voluntary arrangement – either a Company Voluntary Arrangement or an Individual Voluntary Arrangement.
4.    Liquidation for a business or bankruptcy for an individual.
 
The options open to you may seem stressful, but we’ve seen first hand with our clients that once you are dealing with things, taking action and making decisions, you will be able to sleep much better at night.
 
If you’d like to talk through the options with one of our HMRC Debt specialists, please call us on 0800 90 20 123 or get in touch via our contact form.

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