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What are my responsibilities when I have HMRC debt?

Date Added: 22/01/2016  

The way you handle HMRC debt depends on your individual situation, but if you’re a company director, then you have responsibilities to your creditors, your shareholders, your staff and the crown. When making decisions regarding your debt management, it is vital that you take all interested parties into account. This will help you to avoid costly and damaging legal action at a later date.
Your responsibilities to the tax office
When you owe tax, you need to take into account both your current HMRC debt and your future tax liabilities. If you want to avoid your business being wound up, the tax office will want to be sure that your tax debt settlement will not leave you unable to pay your ongoing tax bills.
Your responsibilities to other creditors
You will also have responsibilities to other creditors. If you want your current business to carry on trading in its existing form, then you must be able to meet your obligations and satisfy your creditors. Finally, you are responsible for paying your staff. Being unable to pay any of these creditors can quickly lead to your company being wound up if you don’t take action.
If you are facing a statutory demand, a winding up petition or a winding up order then you need to act NOW. If you have not yet done so, please talk to HMRC about your debt. It may be possible to put in place a Time to Pay arrangement or TTP, giving you around 12 months to pay off your HMRC debt.
If you don’t understand your responsibilities or don’t feel able to talk to HMRC, then please do talk to us about how we can help you with your situation. We can talk to the tax office directly and may be able to negotiate more Time to Pay than is usually allowed.

If you are struggling with your HMRC Debt Management, call 4R now on 0800 90 20 123 and let us help you. Alternatively, you can get in touch via our contact form.

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