Time to Pay Arrangements (TTP) are designed to help viable businesses facing temporary financial problems by negotiating repayment terms for debts they may owe to HMRC. You must maintain the payments agreed in the arrangement; otherwise, the TTP will fail, and you may have to explore other insolvency options.
What is a Time to Pay Arrangement?
A Time to Pay Arrangement (TTP) is an informal repayment arrangement that allows your company to negotiate repayment of its tax bill over a longer period, usually between six and 12 months if you can prove you can afford to.
TTPs can be used to repay VAT, PAYE, and Corporation Tax arrears. They can also be used to anticipate problems with upcoming payments and can be used by limited companies, sole traders, traditional partnerships, Limited Liability Partnerships (LLPs), or any other form of association.
You need to apply for a TTP, and HMRC must approve the arrangement before it can be actioned.
Can I change an existing Time to Pay Arrangement?
If you’re in an existing TTP arrangement and are struggling to keep to the repayments, we can speak to HMRC and potentially arrange an extension.
We will construct a proposal focusing on:
Your sales and cash flow forecasts for the period requested.
Demonstrating how your company will meet the TTP payments.
Showcasing your willingness to meet the repayments.
Your track record with HMRC.
If HMRC accepts the proposal, they’re likely to charge interest on your debt, but may lift penalties if you contact them quickly. If you default, HMRC can cancel the arrangement and apply those penalties.
Our fee for assisting with a TTP depends on the case’s complexity, which frequently relates to the amount of debt involved. Whatever the situation, we will provide a fixed price quote once we have the necessary information. Any initial meeting conducted will be free of charge.
You should only offer to pay what you can afford per month after covering your liabilities and obligations.
What if HMRC Refuse a Time to Pay Arrangement?
If HMRC doubts the proposal or your company’s ability to pay, they will reject your application.
Time to Pay proposals are often rejected because:
HMRC has reason to doubt your ability to clear the debt in the suggested period.
Your previous track records with HMRC aren’t in good standing. This could include a history of late tax return submissions, failure to respond to correspondence, not keeping to previous arrangements, or not keeping HMRC informed of your financial situation.
The business doesn’t appear viable or cannot make a profit rather than just suffering from short-term problems.
How we can help if your Time to Pay Arrangement fails
If your Time to Pay Arrangement fails, other insolvency processes could help you relieve your liabilities.
Company recovery If you wish to keep the company trading, you could explore a Company Voluntary Arrangement (CVA). A CVA is a formal agreement consolidating your debts into a single monthly payment to your creditors. HMRC debt can be included in a CVA, though they may reject it if they’re your only creditor or a TTP has already been rejected. More on Company Voluntary Arrangements
Company closure If your debt is substantial enough that your company can’t continue operating, you may want to apply for Creditor’s Voluntary Liquidation (CVL). A CVL stops all trading, closing your company in an orderly process and is generally more favourable than compulsory liquidation via a winding-up petition, which HMRC may pursue. Following the issue of a WUP, compulsory liquidation means you have no control over the process, and you’re very unlikely to continue trading afterwards. More about Creditors Voluntary Liquidation
How we can help
If you are looking to negotiate a Time to Pay Arrangement with HMRC, or are concerned about your current arrangement, we have the experience and expertise to help you through the process. We have developed strong relationships with HMRC, to put us in a great position to negotiate. If HMRC refuses to accept to terms of the TTP, we can still give advice on alternative solutions which could help save your business.
Speak with our initial advisers via phone, filling in a form or online chat. If suitable, we will arrange a free consultation with one of our consultants to discuss your situation in depth.
After an initial assessment, we will advise if the liquidation of your company is the most appropriate route forward, or if there are other avenues to explore.
We will confirm the necessary steps to place the company into liquidation, and would be engaged to carry out those steps on the director’s behalf.
In summary
A Time to Pay Arrangement (TTP) is designed to let businesses repay their liabilities to HMRC. If your TTP fails, HMRC may begin proceedings to recover what they’re owed. If your TTP fails, or it risks failing due to missed payments, you should contact us to explore other insolvency options to deal with your debts.
