Helen Hughes Accountancy | HMRC’s ‘Time to Pay’ for taxpayers experiencing diffiulty in paying their tax bills
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HMRC’s ‘Time to Pay’ for taxpayers experiencing diffiulty in paying their tax bills

26 Feb HMRC’s ‘Time to Pay’ for taxpayers experiencing diffiulty in paying their tax bills

HMRC have issued some guidelines on their ‘time to pay’ scheme which helps taxpayers who are experiencing difficulties in settling their tax liabilities.

HMRC have published an issue briefing explaining what individuals and businesses should do if they have problems paying the tax they owe.

HMRC say that those facing financial difficulties, which could be a result of business setbacks or a life event that temporarily affects their ability to meet their financial commitments, should inform HMRC immediately as they may be eligible for a ‘Time to Pay’ arrangement.

‘Time to Pay’ is an agreement between HMRC and a taxpayer that allows fixed repayments of a tax debt to be made over an agreed period and can be considered for all types of tax debt. To ensure that they will recover all payments due in full, HMRC will consider certain criteria, including the taxpayer’s previous payment history and their plan for repayment, before agreeing to this arrangement.

‘Time to Pay’ is not an automatic right and should ideally be sought before a debt becomes due, although a possible arrangement can still be considered after a due date. Penalties can be avoided if ‘Time to Pay’ is agreed before the due date.

Once in place, the arrangement will be monitored and if it is not kept, HMRC may resort to other options, such as enforcement action, to collect the debt.

The issue briefing warns that those who do not pay and will not talk to HMRC could face late payment penalties and interest charges that can continue to accumulate on their debt until it is paid. In addition, from April 2014, HMRC will be required to start charging fees whenever they take enforcement action, which could increase the size of the debt even further. HMRC can also resort to removing personal or business possessions to be auctioned, taking court action, or starting insolvency proceedings.

If you believe that you are not going to be able to settle your tax liabilities on time, do not delay and contact the HMRC as quickly as possible to see whether they will grant a time to pay agreement.

Source: CCH Online 23rd January 2014