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Refused a Time to Pay Arrangement (TTP)

A Time to Pay Arrangement (TTP) is an agreement between a company and HMRC for those facing short-term cash-flow issues. They usually last between three and six months and can even extend to 12 months. A TTP comprises of pre-agreed monthly payments to HMRC which cumulatively total the debts you owe. HMRC must agree to the proposal, but they’ll need assurance that you’ll pay what you owe on time. Otherwise, they won’t accept it. So, what can you do if you’re refused a Time to Pay Arrangement?

Reasons for refusal of a TTP

If there is a lack of evidence to suggest the arrangement would be successful, such as the company not being profitable, or a track record of not meeting payments with HMRC, then the TTP proposal won’t be accepted. HMRC like to be confident that what they are owed will be paid in a timely manner, so any reason to doubt this will impede the likelihood of the arrangement being accepted.

If HMRC believes the company is close to insolvency, they may act to wind-up the company to recover their money.

HMRC can also refuse a TTP if you have previously filed taxes late or received penalties, which deems you unreliable and more likely to default on the terms. They will also consider risks based on your industry.

So, what happens if you’re refused a Time to Pay Arrangement?

Refused a Time to Pay Arrangement

Alternatives to a Time to Pay Arrangement

In the wake of a refused TTP, there are other options available to help you return the company to profit while also paying off your debts to HMRC. These procedures, if appropriate, help you avoid being issued a winding-up petition, and allow you to continue trading.

Commercial financing

One option is to secure commercial financing to help you pay off your HMRC debts. Speak to us, and we can guide you on the right kind of financing for your company, as well as compare preferential rates from our top lenders.

Company Voluntary Arrangement (CVA)

You can combine HMRC debts with other unsecured liabilities and consolidate them into a Company Voluntary Arrangement (CVA). A CVA allows you to pay one compounded monthly sum to us for us to distribute to your creditors, putting an end to rising interest rates and creditor pressure. They usually last for around five years and are ideal for companies suffering from recoverable financial blips, but which are ultimately sound and viable businesses. There are benefits and drawbacks for this arrangement, and we’d recommend you speak to our advisors before applying for a CVA.

In summary

If you’re refused a Time to Pay Arrangement isn’t the be-all and end-all; there are other options to pursue to overcome your debt to HMRC. Commercial financing and CVAs allow you to repay your liabilities while continuing to trade through your company. We’d recommend you speak to our advisors before applying for either of these.

How we can help

We can assess your situation and work with you to decide which route forward will be best for your company after a rejected Time to Pay Arrangement. If financing is a viable option, we can provide you with a free comparison service to pair you with the right lender and the best deal. Where a CVA is more appropriate, we will work with you to draft a strong, workable proposal to present to your creditors. All initial consultations are completely free and without obligation, and our advisors are on hand to provide expert guidance and regulated advice.

Authored by Fiona Grant

Fiona Grant

Licensed Insolvency Practitioner

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