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Talk to us if you can't pay your HMRC Debt

Date Added: 09/02/2016  

Many businesses struggle to pay HMRC Debt – PAYE, NIC, VAT and Corporation Tax – at some stage. For some this is just a temporary state of affairs that is addressed by agreeing a time to pay arrangement with HMRC, whereby some of the debt is paid up front, while the rest is paid in monthly instalments over 6 months or so.
For other businesses, the debt is longer term and more severe and the inability to pay HMRC is often a sign that a business is trading insolvently. If the debt is large enough, growing and no attempt is being made to start payments, then HMRC will act and could even issue a winding up petition, with the possible outcome being a winding up order.
If your problems with HMRC have reached this advanced and serious stage, talk to us as we have been able to stop or postpone 95% of HMRC’s winding up petitions for our clients. Compulsory liquidation is not certain. This article details our approach to helping you deal with HMRC and how we can help you avoid the problem in the first place.
Why is HMRC Responsible for More Winding Petitions than Any Other Organisation?
In 2002 “The Enterprise Act” removed the “preferential” creditor status of HMRC, meaning that all tax arrears owed to HMRC became unsecured debt. So the longer they allow a company to trade and build up significant debts with them, the greater their loss in tax income. This is why HMRC issues more winding up petitions than any other organisation. So when you get a warning letter from HMRC stating their intent to issue a winding up petition within 7 days, you must act fast.
How do we stop or postpone 95% of Winding Up Petitions we act on?
A winding up petition is a very serious matter and time is tight to make an effective response. Doing nothing is simply not an option. We have the experience and know-how to postpone or even stop a winding up petition and avoid the subsequent liquidation.
Every case is different, but the principles remain the same: first we talk to you to understand exactly what has happened and why, and then we talk to HMRC to see how we can best work with them to help you. One thing we do know is that HMRC always prefers to be talked to, quickly.
All is not lost when a winding up petition is received. Our experience is that HMRC are often willing to listen to possible solutions, and these solutions include:
-          Raising enough funds to pay off the debt to HMRC. If this is an option, we know which direction to point you in, which might include: Asset Finance or Commercial Funding Solutions.

-          A formal Company Voluntary Arrangement (if informal negotiations are not successful) to come to an agreement and create a payment plan with HMRC.

-          Apply to the Court for an adjournment to allow the company to explore a company administration procedure. If successful, this would halt any legal action.

-          Convince the Court to adjourn or dismiss the petition by showing that the company needs more time to pay or by disputing the validity or accuracy of the debt.
One thing is for certain: if you do not make any response within 7 days, the Court will grant the winding up order, allowing compulsory liquidation to start.
If we are successful in stopping or postponing the winding up petition, then, crucially we will have got HMRC off your back for a while and will have bought some time to work with you to help you turn your business around.

Why wait until you get ‘the letter’ from HMRC?

When it comes to difficulties with paying HMRC Debt, it is possible that the underlying problem is insolvent trading. If this is the case, the longer you wait for things to improve without really taking any positive action, the worse things tend to get.  So why wait for the worst to happen? We are experienced in providing the right advice to you and your business to turn things around, and the sooner you talk to us, the more we can do to help.

Contact us, or call us on 0800 902 0123 if you straight away for a free initial discussion.


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