Given that many UK business have accumulated some form of tax arrears over the last 12 months, the effective management of HMRC as a key creditor will be crucial for those business looking to restructure their debts into affordable monthly repayments. Without a proactive approach to deal with tax arrears, there is a heightened risk of enforcement action and the inability to agree structured payment plans with HMRC.
The key actions and considerations that all businesses should consider before approaching HMRC are the following:
- Ensure that your forecasts are prepared prudently and include reasonable headroom for underperformance, especially in light of the ongoing uncertainty facing many UK businesses.
- Make sure that the proposed HMRC repayments are affordable and in line with expected future trading performance and factor in the requirements of other stakeholders and any future debt service obligations.
- Ensure that the forecasts allows for all future tax liabilities being paid in full and by the due dates as this is a standard pre-condition of any Time to Pay Arrangement.
- Be prepared to demonstrate to HMRC how other stakeholders in the business have provided support through the COVID-19 period and any future support measures that are in place
We have significant experience in negotiating the best possible package of support from HMRC. We can provide additional support during the process if required, including financial forecasting, fund-raising and the management of stakeholders. Please contact us to discuss how we can help.