We use cookies to improve your experience on this site. By viewing our pages, you give us consent to use cookies. Find out more.

Time To Pay Arrangements Explained

Posted 2 months ago

Time To Pay Arrangements Explained
Share this article:

Brought into sharper focus since the outbreak of coronavirus, a Time To Pay arrangement is a way of spreading your business tax payments over a longer period of time to sallow for a more affordable way of making payments. Usually an agreement is reached between the business in question and HMRC to provide breathing space to the business and allow cash flow to improve. 

How does it work? 

Updated as part of the Chancellor’s raft of coronavirus support schemes, a Time To Pay (TTP) arrangement is designed to help businesses that are deemed as viable, but experiencing temporary cash flow issues. The key here is that a TTP is applicable to businesses that are known to be profitable. 

Allowing you to spread your tax payments over a longer period of time, TTP is used for arrears of corporation tax, VAT and PAYE, but can also be used if you are expecting problems with upcoming payments. 

Once you agree to a TTP, you will find that interest will most probably be charged on the amount that is due to be paid. However, any penalties can be lifted if you make contact with HMRC quickly to find a solution. 

How do I apply for a TTP?

You will need to contact HMRC, or seek the assistance of a professional Insolvency Practitioner who will negotiate on your behalf.

But what constitutes a ‘strong’ case? According to HMRC, this is essentially the ability to present a realistic proposal of what you can afford to pay, backed up by evidence in the form of:

  • Sales and cash flow forecasts for the following six months or more

  • A plan of how you will cut costs to free up extra cash

  • Generally conveying your determination to ensure repayments are met.

It is worth remembering that HMRC will want the TTP arrangement to be over in the shortest time, with the highest repayments possible, in order to recoup their money quickly.

Author: Sacha Bright & Oliver Murphy

Disclaimer

To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed. Nextfin is not liable for any damages arising from the use of or inability to use this site or any material contained in it, or from any action taken as a result of using the site. 

Tagged: sme entrepreneur tax alternative finance coronavirus



Be a contributor to our blog click here to contact us
Click here to sign up to our newsletter

0 comments

Log in to comment

We reserve the right to remove comments which are inappropriate and/or offensive.
Comments are not the opinion of Nextfin.uk. Please read the comment guidelines
  • Internet Business Awards Category Award Winner 2015
  • Hertfordshire Business Awards Finalist 2014

As seen in:

  • The Guardian
  • Financial Times
  • Yahoo! Finance
  • The Times
  • The Daily Telegraph