Cash is king in business and it will keep your business alive when we do not know what’s around the corner. Coronavirus has impacted business in an unprecedented way and HMRC have set up dedicated Covid 19 business support.
How to Defer Payments to HMRC
To help improve your cash flow consider deferring your tax payments to HMRC. You still owe the tax but you may be able to agree a Payment Plan with HMRC to ease cash flow.
- The number you need to call is 0800 024 1222. The line is open between 8am and 4pm Monday to Friday (excluding Bank Holidays).
- The Director or Owner of the business must call to discuss payment with HMRC, it cannot be your Accountants or Bookkeeper.
- You will need to explain how your business has been affected by COVID-19 and therefore why you need to delay payment of your taxes.
- All your tax filings must be up to date. Always file even if you cannot pay.
For more details see the HMRC guidance.
These are some examples of Payment Plans being agreed by HMRC by other clients.
Each case varies but many clients have been able to
- Defer PAYE for 3 months
- Spread Corporation Tax over 12 months
- Pay VAT arrears over 6 months
What you need to have when you call the HMRC Helpline for Businesses
The information to have to hand when calling HMRC is;
- Company registration number
- Company address
- Company telephone number
- Company Unique Tax Reference – if discussing Corporation Tax
- PAYE and accounts office reference numbers – if discussing PAYE
- VAT registration number and the figure from box 5 of your latest VAT return filed if discussing VAT. You must continue to file on time, this helpline deals with payment of filed returns.
Top Tips
- HMRC will expect the agreed payments by DD
- Only agree to what you can realistically pay and give clear details of how your business has been impacted by the pandemic.
- If you cannot stick to the DD payment plan call HMRC again and renegotiate.
What to expect
When you call HMRC expect to be on hold for an hour. Pop your phone on speaker and do something else while you wait. Pick something that will keep you in a calm, positive frame of mind. Being pleasant may well get the results you seek.
- Expect to be asked why you cannot pay on time and in full.
- Why are you short of cash? For example, lockdown, enforced closure, less sales.
- Have a rough cash flow drafted to talk through if the details are needed.
- Have you asked the bank for a loan e.g. a Bounce Back Loan. HMRC are not a lender.
- Have the directors been taking dividends from the company? Payroll and overheads are expected to be paid but not dividends before tax.
- Are you up to date with all other taxes? If not you will be passed onto HMRC debt management who can agree on a plan for the whole debt.
- What and when can you pay? HMRC want some payment by the deadline and then an agreement can be reached.
Please get in touch if you want to chat through the call beforehand.