Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

HMRC and Time To Pay Arrangements

Over the last few months, we have seen a hardening in attitude by HMRC towards Businesses seeking Time to Pay arrangements. This seems to be occurring whether this is Corporation Tax (Ltd Companies), Personal or Business Tax, PAYE or VAT.

Obviously all Businesses can experience cash flow problems, but HMRC are now examining cases in more detail, and asking more questions to determine whether the cash flow difficulties are the result of ‘business conditions’ or as a result of poor business acumen.

It is also true to say that HMRC do not appear to have a constant level of consistency as to when a Time to Pay arrangement will be made and accepted, and when it will not?

Certainly some of the type of questioning HMRC appear to use would make a Businessman feel as if he/she is being ‘interviewed’ by one of the dragons from the TV programme ‘Dragons Den’. Thankfully, HMRC have not adopted the style of questioning reminiscent of Detective Inspector Jack Regan and Detective Sergeant George Carter (John Thaw and Dennis Waterman) from the 70’s TV series ‘The Sweeney’.

Usually what HMRC tend to do is to find out the circumstances as to why you are unable to pay the Taxes due on time. If you have had a Time to Pay arrangement previously, then HMRC will start to ask some more in-depth questions.

For example, if you operate a Limited Company and are unable to pay the Corporation Tax or VAT on time, we have found HMRC will tend to ask the following:

  • Have you tried to raise finance for the Company from elsewhere? – They will ask specifically have you approached the Bank? What was the Bank’s reaction and why rejected? Has the Limited Company a Company Credit card it can use?
  • What is the current position of the Directors Loan Accounts with the Company? – If overdrawn (i.e. the Director owes the Company money), rejection is likely.
  • Have dividends been voted and paid to the Director Shareholders? – if so, again rejection is likely.
  • The monthly amount paid in salaries / dividends to the Director Shareholders.

If the Business is a Sole Trader or Partnership, then the questions tend to revolve around:

  • Have you tried to raise finance from elsewhere? – they will ask specifically have you approached the Bank? What was the Bank’s reaction and why rejected?
  • Have you any personal Credit Cards that can be used?
  • Level of personal savings and investments and other personal assets?
  • Any equity in your private property and if so are you able to re-mortgage?
  • Any other properties that can be sold off?
  • Have you approached family and friends for personal Loans?
  • Level of personal monthly income and expenditure?

These questions are by no means the full list of possible questions asked by HMRC, but we are experiencing more and more that HMRC are starting to ask for the evidence that the Client has actually already explored these other possibilities, before turning to HMRC for a time to pay arrangement.

We would recommend that if anyone is considering seeking a Time to Pay arrangement with HMRC, they should contact us and seek our advice first, before speaking with HMRC.


Rickey Cooper FFA, FMAAT, ATT

JCL – Jones Cooper Limited


Leave a Reply

    • Follow us on LinkedIn
    • Follow us on Twitter
    • Foollow as on Facebook