The last few weeks have been a complete whirlwind and many industries (not just travel) have been severely impacted. Even if you did have a crisis plan, by the time it got dusted off it was probably too late! Sales have ground to a halt, suppliers are refusing refunds and customers want their money back! All of these factors put a huge strain on cash flow. Thankfully the UK governments’ response has been swift and hearing “Whatever it takes” from the Chancellor is encouraging.
Whilst many of you await the finer details around the Coronavirus Business Interruption Loan Scheme and various cash grants coming down the track there are some quick wins that will enable you to keep more cash in the business. One way if you’re experiencing financial difficulty is to negotiate a time to pay with HMRC for upcoming VAT, PAYE and Corporation tax liabilities.
There is a specific HMRC Coronavirus helpline for negotiating time to pay – 0800 0159 559. Before you pick up the phone here are 5 things to think about:
Do not delay, call now
You may have VAT, PAYE or Corporation tax payments due, don’t wait until these deadlines have passed. There is a dedicated team of 2000 individuals dealing with the businesses asking for time to pay and it’s far better to be on the front foot with these issues so HMRC works with you.
Make sure your returns are up to date
HMRC can assess your liability far quicker and are also more likely to be understanding if your submissions are up to date.
Forecasts and budgets
HMRC will be expecting you to make suggestions about the amount you can afford to pay, you should have forecasts and budgets ready to demonstrate your ability to repay over the proposed time frame.
HMRC authority limits
Most debt management contact centre staff have the authority to agree to a period of up to 12 months for the liabilities you’re unable to pay. Longer periods can be arranged but usually need to be escalated to more senior staff. Be aware that HMRC will usually expect to set up a regular direct debit for collection over the agreed period.
As part of any agreement with HMRC they will expect that all future tax liabilities are paid up in full at the time they fall due. If you do have further difficulties with future liabilities, it’s advisable you contact HMRC to see if they can include this in the time to pay the debt. There is often a reluctance to further requests but given the current climate, this may be unavoidable.