Help with HMRC Pressure
Is your company experiencing difficulty paying HMRC?
What Happens If My Business Can't Pay HMRC?
If your Limited Company is having difficulty paying HMRC, you may be wondering what the consequences might be. Failing to pay your taxes can have serious repercussions, including legal action, penalties, and even the closure of your business. It's important to act quickly to address the issue before it escalates.
The Directors' Helpline can provide help with HMRC pressure if you're facing debt problems. Our experienced consultants can help you find a solution that works for you and your business. We offer professional business advice and support, as well as guidance on how to negotiate with HMRC.
Frequently Asked Questions
Company debts to HM Revenue and Customs (HMRC) can arise from a range of taxes, including corporation tax, VAT, PAYE, and National Insurance contributions. These debts can often be one of the main causes of financial problems for UK businesses.
It's important for businesses to address HMRC debt issues as soon as possible to avoid these consequences. The Directors' Helpline can provide guidance on how to deal with HMRC debt and help you find a solution that works for you and your company.Get in touch
HMRC has the power to inspect business bank accounts in certain circumstances. This can happen if they suspect that you're not paying the correct amount of tax or if you're involved in other fraudulent activities.
If you're concerned about HMRC checking your business bank accounts, it's important to seek professional advice. The Directors' Helpline can provide guidance on how to protect your business and ensure that you're complying with HMRC regulations.Get in touch
A Time to Pay (TTP) arrangement is a formal agreement with HMRC that allows you to pay your tax debt over a longer period. However, it's important to note that a TTP is not a solution for all businesses. HMRC will only grant a Time To Pay arrangement if they believe that you can realistically pay off the debt within the agreed timeframe.
To apply for a TTP arrangement, you need to contact HMRC directly. Time To Pay Arrangements are usually made over the phone with HMRC. During the phone call, you will be asked a few questions regarding your company. This includes the circumstances which have led to your company being unable to pay its outstanding bill, and to state what you can afford to pay on a monthly basis. You can call HMRC on 0300 200 3300.
Can HMRC Close My Business?
HMRC can petition for a Compulsory Liquidation (Winding Up Petition) to force your business to close if you've failed to pay your tax bill. This is a severe consequence that can have a devastating impact on your business and its reputation. However, it's worth noting that HMRC will usually only take this action as a last resort, after other options have been exhausted.
However, if the company has assets then sometimes a HMRC field officer will visit and can distrain on these assets, uplift them and sell them to offset against the debt.
Our team can provide expert advice and support to help you if you're having difficulty paying HMRC debts.
Is It Possible to Write Off Business HMRC Debt?
HMRC debt is written off only in a formal insolvency process such as Liquidation. This is a complex process that requires expert advice and support.
HMRC do offer Time To Pay schemes for businesses that are struggling, or a Company Voluntary Arrangement may be more suitable as it allows the company to pay back unsecured debts (typically over 5 years) and is based on the cashflow and affordability of the business.
If you're worried about paying business HMRC debt, it's important to seek professional advice beforehand. The Directors' Helpline can provide guidance on the options available to you and help you negotiate with HMRC.
How to close a company with HMRC debt
If you're looking to close your Limited Company but have debts that you can't pay off to HMRC or other creditors, your company is deemed insolvent, and you must immediately cease trading and seek professional guidance.
A Creditors Voluntary Liquidation (CVL) is the proper way to shut down an insolvent company. Any unpaid debts are typically written off after the sale (or ‘realisation’) of company assets, unless they're secured debts or you've given a personal guarantee to the creditor.
As a director, you have a legal duty to prioritize the interests of creditors, so it's vital to know your choices when closing a limited company with outstanding HMRC debt. The Directors' Helpline can provide confidential and dependable advice on how to manage HMRC debt and company closure.
Am I Personally Liable for Business HMRC Debt?
If the Director is found to have purposely failed the company’s National Insurance liabilities, HMRC can make the Director personally liable for the repayment through a Personal Liability Notice.
If you close your Limited Company but don't follow the proper procedure, you could face complications or personal liability as a director, and HMRC is one of the most aggressive creditors that takes swift action against debtor businesses. If you’re not sure and need help, please get in touch with our team to discuss your specific circumstances.
Can HMRC Chase a Dissolved Company?
If your company has been dissolved and still has outstanding HMRC debt, it's not necessarily the end of the matter. While dissolution is a process typically used for solvent companies with no debts, it's not the correct process for insolvent companies or those with HMRC debt.
This means HMRC could still chase a dissolved company by reinstating it and then placing it into liquidation - which is a formal process that would trigger an investigation into the company and Director’s affairs that led it to becoming insolvent. HMRC could go back up to six years after the date of dissolution (or up to 20 years if there are allegations of serious fraud or negligence).
If you're facing HMRC debt issues, it's important to seek professional advice. The Directors' Helpline can provide expert guidance on how to deal with HMRC in these circumstances.
Can HMRC Chase a Liquidated Company?
If the company is in liquidation or has been liquidated, then the debts (including anything owed to HMRC) will have fallen into this process as a liquidation cannot be objected to. It is the appointed liquidators’ job to carry out the Directors investigation and conduct reports.
Sometimes, HMRC will insist the company is wound up through a compulsory liquidation rather than a voluntary liquidation if it’s in the public interest, which means an official receiver will conduct the investigation.
Frequently Asked Questions
Yes, HMRC has the authority to visit your business premises, and if your home address is the registered address on Companies House, they could come to your home. The purpose of a HMRC visit is to inspect your records or investigate suspected tax fraud. However, such a visit is usually a last resort after other measures have been exhausted.
If you're worried about an HMRC visit to your home, it's recommended that you seek professional advice. The Directors' Helpline can provide guidance on how to prepare for an HMRC visit and ensure that you're complying with HMRC regulations.Get in touch
HMRC can persist for a considerable amount of time if the debt is left unresolved. HMRC can be very aggressive and have the authority to pursue debts up to 20 years old, so there's no chance of them forgetting what is owed. Failure to address the debt in a timely manner can result in legal action, with HMRC having the power to:
- seize assets
- take court action
- pass the debt to a debt collection agency
- initiate Compulsory Liquidation
To avoid such consequences, it's crucial to deal with the debt issue promptly. Seeking professional advice from The Directors' Helpline can help you navigate the situation and find a solution that works for your business.Get in touch
I Need Help with HMRC Pressure
If your Limited Company is facing HMRC pressure and needs help, speak to our team today. Our experienced business consultants can provide free, confidential guidance and support to help you find a solution that works for you and your business.
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