When a business is in arrears with HMRC it has the following 6 options
- Agree a time to pay plan to repay it (TTP)
- Raise finance to pay it off
- Attract some Investment
- Do nothing
- Sell the business
- Put the company into administration or liquidation
This is normally the preferred route. This is something that you, your payroll/VAT clerk, accounts clerk, bookkeeper or accountant could do. However, if they are not familiar with HMRC debt management staff or procedures they may not get a positive result or a lengthy time to pay. We are very familiar with HMRC debt management staff and procedures and we have the email addresses, direct telephone lines and in some cases the mobile phone numbers for over 100 staff at different levels of seniority and within different departments at HMRC. We deal with them on a daily basis and often achieve agreement to repay outstanding HMRC arrears when previous attempts have failed and even when previous time to pay arrangements have failed.
Not easy. Who wants to lend a business some money to pay off it’s tax debt? Certainly not a bank and if you alert your bank to the fact that you are having difficulty paying your VAT, PAYE or Corporation Tax it could jeopardise existing overdraft or other facilities you have with them. We can introduce you to specialist lenders that are happy to arrange a finance facility in the full knowledge that it is to repay HMRC arrears. You may even be able to get additional funds to help with your cash flow. Finance can be raised against assets, invoices you have raised but not yet been paid on and against the turnover that goes through your credit card terminal.
Again, not easy to get somebody to invest in a business that is in difficulty but not impossible. We know personally a small number of wealthy private individuals who are actively looking to invest in businesses where they can see the potential for a good return. We also have access to some institutional investors so whether you need a few thousand pounds or a few million it is worth a phone call.
Not the best option. If you do nothing, that is you don’t pay the money back, you don’t contact HMRC when they contact you and the debt is increasing then eventually HMRC will issue winding up proceedings against the company. A court date will be set at the High Court in London and on that date the company will be put into liquidation and the Official Receiver will be appointed as liquidator. Following this there will be a lengthy investigation into the affairs and activities of the company and all the Directors will be interviewed and investigated personally regarding their conduct. These investigations commonly last years. From personal experience not recommended.
Great in an ideal world but it’s not easy to sell a business that is in arrears with its tax liability. Even if you decide to try and sell the
business then it is likely you will need to come to some arrangement with HMRC in the meantime to ensure they do not take any enforcement action. We can assist you with this.
Always a last resort but certainly not the end of the world and sometimes if negotiations with HMRC fail then it is unavoidable and inevitable. If this is the case then it is always best for you to be in control of this process than one of your creditors, especially HMRC. We can introduce you to an Insolvency Practitioner (who are the only people that can act as liquidators or administrators) that we know and have dealt with many times in the past and who can guide you through the process of administration or liquidation. We will assist you in collating the information required by the Insolvency Practitioner.
Although it will mean the end of the current Limited Company and all of it’s debts will disappear it does not mean the end of your business and livelihood that you have worked so hard to build up. It is legally possible to set up a new company to continue in business but you will have got rid of all the debt of the old company and you will have a fresh start. It is also possible, with the agreement of the liquidator or administrator, for the new company to acquire from the old company the things that are important i.e. customers, website, telephone numbers, assets, employees etc. Pretty much everything except the debt. It is important that things are done in the correct manner and timescale.
For more information click here www.shouldiliquidate.co.uk
Click on an image to enlarge an example letter
Why should you come to us and not go direct to your bank, accountant or insolvency practitioner?
None of the above deal solely and specifically with HMRC arrears and none of the above offer all the services that we do. Because of this they cannot have the expertise or knowledge that we have nor is it likely they will have as many contacts with HMRC debt management that we have.
Don’t suffer any longer having sleepless nights, dread opening the post or answering the phone or the door. Give us a call now and we will see if we can assist you in any way. Our initial discussion and first meeting is totally free of charge, without obligation and totally confidential.
Please give us a call for a free no obligation chat about how we may be able to help you.