Informal arrangements are available for with HMRC to allow time to pay for tax arrears of VAT, PAYE, Corporation Tax, National Insurance (NI) and Self Assessment (SA).
A time to pay proposal can be put forward to HMRC in order for your business to survive.
A plan needs to be drawn up that has to be affordable. A trading company who is VAT registered and has employees will as a matter of course always have to account for ongoing VAT and PAYE/NI. The last thing that you want to happen is to be in a time to pay scheme whereby you are not able to afford the current tax liabilities.
The plan needs to be carefully calculated and considered on how to make stage payments. A cashflow forecast should be completed so that you can quite clearly see when spare cash is going to be available to make the required payments and keep up with the plan.
A business plan should also be drawn up for the specific intention of how you are going to deal with the debt owed to HMRC for tax arrears, this should include what cost cutting exercises are going to be undertaken, how you are going to increase sales and renew growth.
By acting early with the correct plan of action and relevant advice this will also stave away the possibility of be accused of any wrongful trading allegations.
Having tax arrears with HMRC and being in a payment plan can ultimately set the time line running of when wrongful trading can start, therefore you have to be 100% sure that a time to pay scheme is affordable and achievable.
Once you are in a time to pay scheme you have to constantly review management information, including but not specifically the current balance sheet, profit and loss account, cashflow statements, business plan, sales targets, aged creditors, and aged debtors.
Contact us now for a free review to ensure that a time to pay scheme tax arrears scheme can work for you.