If your company owes HMRC money, knowing how to approach them can make all the difference. Chris Worden explains the right steps to take, helping directors avoid costly mistakes and improve their business’s chances of recovery.
- Contact HMRC early to avoid penalties and enforcement
- Prepare cash flow forecasts before speaking to HMRC
- Understand what HMRC wants from struggling businesses
- Build a realistic repayment proposal
- Seek professional advice if insolvency is a risk
Why Early Action Matters
Delaying contact with HMRC increases interest, penalties, and the risk of enforcement. Acting quickly gives you more options and shows HMRC you are taking your obligations seriously.
First Steps Before Calling HMRC
- Assess your company’s true tax position
- Prepare an accurate cash flow forecast
- Gather all relevant financial documents
Chris Worden recommends understanding your cash flow and tax liabilities before making contact. This preparation helps you present a credible case for support or a Time to Pay Arrangement.
Negotiating with HMRC
When negotiating, be honest and realistic. HMRC is more likely to accept a proposal that is achievable and well-supported. Avoid making threats or unrealistic promises, as these can backfire.
Learn more about dealing with HMRC arrears and tax debt and how to build a strong case for a Company Voluntary Arrangement if needed.
Common Mistakes to Avoid
- Failing to keep up with ongoing VAT, PAYE, and Corporation Tax payments
- Not ring-fencing tax money
- Ignoring deeper financial problems
- Failing a Time to Pay Arrangement
If HMRC debt is a symptom of wider issues, restructuring or company liquidation may be more appropriate. Chris Worden stresses the importance of recognising when a payment plan is not enough.
When to Seek Professional Advice
Early insolvency advice can preserve more options for your business. If you’re facing creditor pressure or cash flow problems, consider a free business insolvency check to explore your options.
For more insights, visit our Info Vault or learn about Chris Worden and his experience helping directors through HMRC negotiations.
Key Takeaways
- Contact HMRC as soon as you anticipate payment issues
- Prepare thoroughly before any discussions
- Be realistic and honest in your proposals
- Seek professional advice early to maximise your options
Frequently Asked Questions
- What should I do if I can’t pay my company’s tax bill?
- Contact HMRC immediately, prepare a cash flow forecast, and seek advice if needed.
- Will HMRC agree to a payment plan?
- HMRC may accept a Time to Pay Arrangement if your proposal is realistic and well-supported.
- What happens if I ignore HMRC arrears?
- Ignoring HMRC can lead to penalties, enforcement action, and increased risk of insolvency.
- Can I negotiate with HMRC myself?
- Yes, but professional advice can improve your chances of success and help avoid mistakes.
- When should I consider insolvency advice?
- If HMRC debt is part of wider financial problems, seek insolvency advice early.
