Can’t Pay Corporation Tax – What Next?
When you Can’t Pay Corporation Tax on time and have mounting corporation tax arrears. Act quick. Contact licensed Insolvency Practitioners. The HMRC will commence debt recovery firstly with threatening letters followed by enforcement action if you fail to connect. Avoid receiving a winding-up petition by acting fast for help
As a director of a limited company which is in financial difficulties and unable to pay your annual Corporation Tax, it is crucial to ensure that you deal with the problem. It will not go away. Interest, Fines and the potential visit from a Bailiff may follow.
So act now. Consult with HBG Advisory 0800 612 5448 and arrange an online meeting today to deal with the problem. Various closure options exist along with business rescue if you can’t afford to pay HMRC.
Contact the HMRC.
Once you have accepted you are unable to pay your Corporation Tax Bill on time or at all, then before the date payment is due, contact the HMRC.
You need to speak with the Business Payment Support Service on 0300 200 3825.
If they reject your request for help, then contact HBG Advisory for immediate assistance. We have years of experience dealing on matters of tax. By contacting us, it does not infer that you are entering insolvency. Indeed a big part of our briefs is to act in a purely advisory capacity.
Can you Pay Corporation Tax by Installments?
The HMRC will listen to your request. You must ensure you have your facts and figures correct ready for questions by the HMRC. Usually, they will inquire as to why your company is finding it difficult to pay the tax? Also, they will ask what effort have you made to attempt payment. Finally, ensure your company can pay if asking for instalments. Do not agree if you are unable to agree to an acceptable payment plan. Seek help immediately from HBG Advisory.
If the HMRC agree to an HMRC Time to Pay arrangement, tax payments are then made by monthly instalments up to usually 12 months. The HMRC will agree with this when the company cannot pay now but has the ability over 12 months. The HMRC will maintain the ttp arrangement for tax liabilities if you do.
Ensure you keep to the plan on the set dates if you fail. The HMRC pay petition to Wind Up the company.
Delaying Corporation tax Payment?
Especially during the time of COVID-19 HMRC have made it clear they’re prepared to show tremendous flexibility with business owners struggling to pay.
Whether it’s Coronavirus or another extenuating circumstance, it’s best to speak honestly and forthrightly with HM & Revenue about your particular situation. You may be surprised at their response.
Negotiating “Time to Pay ttp” with the HMRC.
Negotiate with HMRC to pay your tax bill. Though, it is wise to use an experienced firm, to act for you.
Negotiations work though if you have a viable business and have not had previous failed talks in the past.
However, if you fail to pay or agree on an arrangement, they will begin enforcement to recover the debt.
In the form of:
Earnings or pension directly.
Instruct debt collectors.
Apply to your bank for the money.
Take possession of company assets and sell them.
Apply to the courts for recovery.
Wind the business up.
As a Director, am I Personally Responsible for Corporation tax?
As a Company Director, you are a separate legal entity to your company. Therefore, directors personally are not liable for your companies liabilities (Unless you have given a personal Guarantee.) in insolvency, however, you may be liable if you traded wrongfully or fraudulently.
If involved in the knowing mismanagement of your company, as a company director, you may be personally liable then for monies owed and not rank in the normal mode of paying creditors.
So ensure you keep up to date with your company records and make every effort to pay your tax bills. Keep control of how your cash flows. If it helps change your accounting periods (Speak with your accountant for advice). Additionally, ask your accountant to produce management accounts monthly and explain them.
In conclusion, if you are a director, act responsibly.
The Team at HBG Advisory