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Time to Pay Arrangement not Given

Time to Pay Arrangement not Given

I was hoping for some guidance with regard to HMRC business support team and a time to pay arrangement.

Last year my client was given a 6 month time to pay arrangement for Corporation Tax.  They did not miss a payment and all was paid on time.

This year we asked for a 3 month time to pay arrangement for corporation tax due to the discovery of Asbestos.  HMRC have said no.

HMRC state that the CT should be paid before the building is fixed.

My client cannot trade in the building and if they pay the CT will be in financial trouble.

Is there any appeal mechanism for a time to pay agreement or should they not pay and negotiate with debt management.

Thanks in advance for help.

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29th Feb 2016 08:47

Just do it
if your client needs only 3 months, just do it. Make 3 payments over 3 months. By the time HMRC have caught up, the CT will already have been paid. They'll be done interest to pay but that's just a cost of business.

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By Old Greying Accountant
29th Feb 2016 09:31

As the tax is due ...

... after 9 months but the return not due for 12 months the best practice imho is to not pay or file until the last day the return is due, this gives you 3 months time to pay as without the return HMRC cannot chase - as there is no debt to chase on their books

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By JimFerd
29th Feb 2016 09:48

Like the above has said - If it's only 3 months I doubt debt management will get involved.

Only thing to consider would be things like CIS gross status conditions - if that's even applicable to your client. Saying that, a time to pay could perhaps breach that anyway.

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By DMGbus
29th Feb 2016 10:26

CIS - Gross Status - TTP advisable

I can fully understand that it is sensible to apply for a Time To Pay arrangement when operating in the CIS.

Reason being potential loss of gross payment status.

I have copies of HMRC guidance confirming that Gross status will NOT be prejudiced if a TTP is in place.

For that very reason I actually arranged a TTP for a client last week re: paying CT over a 3 month period.

Guidance / pointers that I found before making the TTP were as follows:

A TTP is meant to be a one-off - HMRC do not like "repeat offenders"To qualify for a TTP HMRC expect all avenues of finance / borrowing / bank OD to be investigated / exhausted firstIt is possible to justify a TTP if a sudden unexpected a financial crisis can be demonstratedIt is helpful to specify how the TTP will be avoided next time, eg. company will make arrangements / provision for next time's liablity

Based on the above and last week's amicable phone call that I had to arrange a TTP I would be surprised if a TTP was now refused for the OP's client - the OP's only "black mark" is the "repeat offender" situation.    An asbestos discovery and (presumably) immediate legal obligations arising are surely an unexpected financial crisis.  My advice is therefore "try again".

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By Ruddles
29th Feb 2016 11:44

CIS

Late payment of CT will no longer affect CIS gross status

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01st Mar 2016 11:58

Well

For what its worth a client of mine persuaded HMRC to give him a second TTP for corporation tax after I called them and they refused due to him being a repeat offender.

Apparently he called them and said "Its bollox that Starbucks don't pay corporation tax but I do."

They agreed to £1,000 a month for 9 months......

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01st Mar 2016 15:08

I agree with James

I always tell clients not to ring up, just pay by instalments. HMRC staff these days are told to be nasty to debtors and suggest they use a credit card etc so why bother with the argument?

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01st Mar 2016 15:40

Asbestos kills.

So, they are expecting your client to put the lives of his staff at risk so that the tax can be paid now rather than in a few months time?  I would be trying to get them to confirm that position in writing, then pass it to the press and his MP. 

 

I'd also be tempted to insist on paying them by cheque, written in the building, and point out that your client will not be responsible if the HMRC staff breath in any asbestos dust on the cheque.  

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01st Mar 2016 16:15

Alternatives

Black Dog wrote:

So, they are expecting your client to put the lives of his staff at risk so that the tax can be paid now rather than in a few months time? 

No, they are expecting your client to borrow from someone else. In the real world, rather than the posture striking one, just pay the instalments you suggest and tell them that is what you are doing, then pay the interest

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