Do you need time to pay HMRC VAT, Tax, PAYE and CIS? Tax arrears?
If you need to get time to pay HMRC unpaid VAT, Self Assessment Tax, Corporation Tax, PAYE and CIS, and further time to pay overdue tax arrears, you need to make an arrangement to pay with the creditor; contact HM Revenue & Customs.
You can get a payment plan.
Do get in touch as soon as you forsee a problem.
How HMRC view late payment and arrears
There are two distinct levels of tolerance for late payment
Where tax is assessed on your income and profits
Self assessment - Personal tax
Where you act as a collecting agent for The Crown
Construction industry scheme CIS
In these situations you are viewed as having collected the money and then withheld it from payment.
You can get time to pay VAT tax and PAYE. Although you need to bear the differences in mind, the collection attitude of HM Revenue & Customs is similar in both situations. You need to telephone whoever has sent you the demand and reach an agreement with them.
If you are able to pay the arrears before the due date for the next amount, this will normally be readily agreed.
If you need more time than this to pay you need to take the later payment dates into consideration with your offer.
HM Revenue & Customs wish to avoid being involved in the finance of your businesses and you are expected to use available funds and consider normal lines of borrowing in order to pay taxes. They will always charge interest and, in some cases, late payment may incur additional amounts of penalties.
Self Assessment Payment Helpline
- Telephone: 0300 200 3822
- Tax liabilities under £30,000.
- Once you have filed your tax return.
- You can set up a payment plan to spread the cost of your latest Self Assessment bill.
- If you have a Government Gateway you can do this online
- Government Gateway user ID and password Guidance on applying
- Tax liabilities over £30,000.
- Telephone: 0300 200 3835
- Apply for a Government Gateway
- You first enter your email address.
- You get back a confirmation code which you use to move forward with the application.
- Have available:
- Unique Taxpayer Reference UTR - if you have one.
- National Insurance number.
- Driving license or passport details to link you into other Government records.
- Telephone number.
- Apply: "Create sign in details" on the Sign in screen.
- You get a Government Gateway number.
- Set the Password.
- You are then ready to use the Government Gateway
- and set up a payment plan.
HMRC Self Assessment Budget Payment Plan
If you need both time to pay an existing liability and wish to progress onto making regular payments in advance by Direct Debit telephone the HMRC Payment Helpline 0845 366 1204.
see also Paying Self Assessment Tax - By Direct Debit - Budget payment plan
HMRC Business Payment Support Service Help Line 0300 200 3835
There is a formal initiative and time to pay helpline for businesses who anticipate needing time to pay. By entering into a time to pay agreement in advance of the due date for VAT and income tax, and adhering to the terms of the agreement, you can avoid VAT late payments penalties and income tax late payment penalties . VAT and tax returns must be filed on time to avoid late filing penalties. Contact Business Payment Support Help Line 0300 200 3835 and the full details are at
You then need to contest and appeal any notices you should subsequently receive. Time to Pay arrangement are often not advised to other parts of HMRC. Ignoring subsequent notices can result in bailiff action.
The scheme started November 2008 and by the end of June 2011: 444,400 proposals were agreed (95% of proposals) and 23,300 were refused. It is estimated that 87% of tax agreed under these arrangements had been paid by June 2011; being £6.7 billion.
It was announced in July 2011 that no further statistics will be issued but "There are no plans to close the Business Payment Support Service or change HMRC's Time to Pay policy or approach".
You can carry tax losses back into previous years.
If you are incurring tax losses in the current year these can be taken into account in Business Payment Support arrangements in respect of overdue and unpaid profit taxes.
You need reliable accounting records to demonstrate this to HMRC.
Dealing with HMRC Collection offices
HMRC Collection agencies
Most collection activity currently encountered is from subcontracted collection agencies based at bailiff offices. The telephone numbers on tax statements go directly to the bailiff offices. They have little negotiating capacity and limited access to taxpayer records. They presumably work on commission which results in increased aggression. They are held out as working for HMRC which is not strictly true - they work on instruction from HMRC. If you need to amend the amount of tax being collected contact your own tax office and not the telephone number on the tax statements.
They often threaten legal action but they cannot, themselves, implement this. See HMRC Worthing Office below.
HMRC Bailiffs - VAT Bailiffs
HMRC Bailiffs act independently on instruction from a tax office with powers to collect unpaid PAYE, NI, CIS, VAT and tax. If HM Revenue & Customs HMRC are threatening to send bailiffs, you need to reach agreement with that tax office before the bailiff action can be discontinued. If you act reasonably and positively following a first visit or threat, matters can normally be resolved.
When making telephone contact you need to refer to earlier correspondence; telephone numbers given by bailiffs are bailiff office numbers and not tax offices.
Bailiffs call without prior notice
There will have been previous correspondence from HMRC but, on the day, bailiffs call without prior notice.
They often say that they work for the tax office which is not strictly true - they work on instruction from HMRC.
HMRC staff will always make an advanced appointment and do not make visits to collect money.
Taking away of possessions is not normally the first resort of a bailiff. In more extreme situations they may take a walking possession which means that you are not free to dispose of that possession until you reach agreement with the tax office. They do not have right of entry into your premises but if you let them in they may exercise possession rights. This draws them to exercise possession on vehicles outside the premises or to threaten such action.
Only possessions of the specific taxpayer can be threatened with seizure. If it is Corporation Tax or other company liability, only company possessions can be involved and not those of the director personally.
This is particularly important if they call at your house.
Where it is a personal liability of a husband, the wife's or other residents' possessions cannot be threatened with seizure.
HMRC Bailiffs normally act positively to get the problem solved, however, they act on a narrow instruction; they either collect or do not collect, they cannot negotiate with you. They are paid by the visit and as a proportion of funds collected which can result in a more aggressive attitude. Their objectives diverge from those of the tax office, they have no interest in your reaching agreement with the tax office because this takes business away from them. It can lead them to make misleading and inaccurate statements in order to collect money. If this should happen, and you consider that you have acted reasonably and positively, do not be put off by such an encounter and reach agreement with the tax office as soon as possible.
If you have been frightened by the assertions of an HMRC bailiff, try to take time to consider them rationally and consult your accountant or solicitor.
Insolvency action can only be conducted by HMRC Worthing Office.
A bailiff cannot "make you bankrupt" or "put you into liquidation".
HMRC Worthing Office
HMRC Worthing is the Debt Management Enforcement & Insolvency office. Cases are referred here when HMRC consider that matters have moved beyond normal collection parameters. Even so, reasonable proposals for payment will still be considered.
However, at this stage the tax payer does need also to consider the insolvency options of:
liquidation if a company or
bankruptcy if an individual.
Worthing staff will try their best to avoid insolvency proceedings if this should be your wish.
Conversely, if your case is not with Worthing, HMRC are not taking active insolvency proceedings against you.
At this point a self employed sole trader may wish to consider forming a limited company to protect yourself in the future. A bankrupt person cannot be the director of a limited company.