Navigating HMRC’s Time to Pay Arrangements: A Guide for Businesses
As an accountancy firm, we understand that managing tax liabilities can sometimes be challenging. Unexpected financial pressures can make it difficult for businesses to meet their tax obligations on time. Fortunately, HMRC offers a solution through Time to Pay (TTP) arrangements, which allow businesses to spread the cost of their tax liabilities over a more manageable period. This blog post provides a comprehensive guide to help you set up and maintain a TTP arrangement with HMRC.
Tax Liabilities That Can Be Included in TTP
A TTP arrangement can cover various types of tax liabilities, including:
VAT
PAYE
Corporation Tax
Self Assessment
HMRC Contact Details for Setting Up a TTP
To set up a TTP arrangement, contact HMRC using the following details:
Telephone number: 0300 200 3887 (Follow the options for the relevant tax service)
Opening hours: 8 am to 8 pm, Monday to Friday
Information Needed to Set Up a TTP
When contacting HMRC, you'll need to provide specific information based on the type of tax liability:
VAT
VAT registration number
Company Name
VAT address
Details of all returns to be included in the TTP
Bank details for the monthly payments
PAYE
PAYE Reference number
Accounts Office Reference number
Company Name
PAYE Address
Details of all PAYE submissions to be included in the TTP
Bank details for the monthly payments
Corporation Tax
Company UTR Number
Company Name
Corporation Tax address (as registered with Companies House)
Details of all Corporation Tax returns to be included in the TTP
Bank details for the monthly payments
Self Assessment
Personal UTR Number
Client Name
Home address
Details of all Self Assessment Tax returns to be included in the TTP
Bank details for the monthly payments
Setting Up the TTP with HMRC
When you contact HMRC, be prepared to discuss the following:
Previous TTP Arrangements: HMRC will inquire if any previous TTPs were set up. A history of TTPs doesn’t automatically disqualify you from setting up a new one.
All Liabilities: Clearly include all liabilities that need to be covered by the TTP.
Affordable Payments: Ensure the agreed monthly payment is affordable. You can extend the TTP term to lower the monthly amount if necessary.
Reasons for TTP: Explain why the TTP is needed. This could be due to loss of business, large contracts, or personal/health issues affecting the business.
Improvement Plans: Describe what steps are being taken to improve the business and avoid future TTPs. Our firm can assist with this.
Payment Date: Agree on a monthly payment date.
Bank Details: Provide your bank details and request HMRC to confirm the direct debit number, which is a 9-digit number needed for future contact about the TTP.
Maintaining the TTP
It’s crucial to keep up with the payments under the TTP arrangement. If a payment is missed, HMRC typically cancels the TTP and seeks to recover the full outstanding amounts. If you anticipate a payment issue, contact HMRC as soon as possible to explain the situation and request a change to the payment date or amount. Provide reasons for the adjustment and contact HMRC well in advance of the next payment date to allow time for updates.
Conclusion
Setting up and maintaining a TTP arrangement with HMRC can provide much-needed relief for businesses facing financial difficulties. By following the guidelines outlined in this playbook, you can ensure a smoother process and maintain good standing with HMRC. If you need assistance at any stage, our firm is here to help. Contact us to discuss how we can support you in managing your tax liabilities effectively.