“I owe VAT and PAYE payments”

HMRC Arrears

If you have built up arrears of VAT or PAYE you need to take action because HMRC knows.
Either you have submitted returns and not paid the amount due or you have not submitted returns. When returns have not been submitted HMRC assesses the amount due such that its demands can be for far more than the actual amount due.
But don’t worry. It doesn’t have to be the end for your business. And our experience is that HMRC is very supportive, providing you or your advisers are proactive with proposals for repaying the arrears.
Depending upon the situation and ability to pay the arrears, there are a number of alternative ways of dealing with the arrears which are all covered in this section.
Please feel free to look at the guidance in this section and for more information and articles visit our resources page.
Or call us for a free initial consultation.

“What can I expect from HMRC?”

Understanding HM Revenue & Customs (HMRC)

HMRC has an obligation to administer, receive and where necessary collect taxes that are due. So its primary concerns are compliance with obligations to pay and enforcement when they are not paid.

Their greatest problems are:

  • getting directors to communicate with them;
  • getting directors to submit late returns to bring them up to date;
  • getting directors to submit proposals that fit their guidelines of acceptability.

HMRC normally makes every effort to make contact with the company by sending several letters and following up phone. If they continue to be ignored its collection process escalates eventually to enforcement and insolvency which can result in the company being compulsorily wound up.

HMRC’s approach to dealing with agreed arrears tends to place companies into four categories

  • payment in full;
  • deferred payment under a Time to Pay arrangement;
  • deferred payment with possible compromise to accept a reduced amount under a Company Voluntary Arrangement;
  • enforcement due to no payment or default payment agreement.

HMRC has dedicated teams that specialise in the relevant process for each category. This is very helpful for professional advisers who are familiar with each team’s guidelines of acceptability when making proposals.

Call K2 for help with understanding how to deal with HMRC