Paying 31 January 2015 income tax by instalments

Paying 31 January 2015 income tax by instalments

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Hello,

I have a client who does not have the money available to pay their tax bill by 31 January 2015.  I've reviewed the budget payment plans and called the HMRC office and spoken with a very abrupt and quite obtuse individual who has said they are not a bank and to go to a bank to get a loan instead.

I'm a little annoyed because in this day and age this is not so straightforward for those of us who regularly have trouble with our cash flow.

Is there any way of arranging to have this budget payment plan set up or will my client be left with a huge charge when the bill is unpaid please?

Replies (19)

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By Anne Robinson
21st Jan 2015 17:50

I have given up in trying to get time to pay for clients.
If you go to HMRC website and look at the questions they say they will ask, such as asking a family member, credit card, bank loan and what you actually spend your money on - it takes a lot of nerve to stand up to them so in reality time to pay scheme really doesn't exist.

On the other hand those under PAYE don't have this luxury nor an extra 9 months to pay their tax so really they should be putting something aside each month in advance. After all it does come around every January and July - it shouldn't come as a surprise.

Often with clients is it a case of not actually wanting to fork out rather than can't.

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By Minnie136
21st Jan 2015 17:50

Your client can arrange a time to pay arrangement with HMRC.  I am surprised HMRC did not advise you of this.  You cannot arrange it for them though.  There is a number to call but I do not have it to hand but I am sure you can look it up.

Obviously your client should have put the money aside.

 

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By taxation4
21st Jan 2015 18:20

Business Payment Support Line

The latest number I have is 0845 366 1204.

This service was set up in recognition of the country being in a recession.

Don't know if it's still in use.

 My clients who did call were very kindly dealt with.

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By Anne Robinson
21st Jan 2015 19:05

When it was first set up it was very easy to get an arrangement but it is a whole different kettle of fish now.
Partly I think because taxpayers were using it as a fairly cheap loan even if they could afford to pay it all at once.

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By Sherman Holter
21st Jan 2015 22:39

Or just do it

I once took on a client who had HMRC debt (not a bad guy just an ostrich) and he had tried phoning HMRC to suggest paying over eighteen months and got the same response as the OP.

He hadn't yet heard from the Debt Management Unit so we did a budget and I advised him to start paying them weekly.  He took the advice and never did hear from the DMU even though it took (funnily enough) about eighteen months to get himself squared up.

Seems that the DMU look at a file, see regular payments being made, do the maths and move on to the next file. 

 

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Replying to marks:
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By John Wheeley
28th Jan 2015 11:16

Pay something every month

I agree with Sherman, get your client to pay something every month. It shows willingness to clear the debt and it seems to satisfy the HMRC system.

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By totallytopcat
21st Jan 2015 22:58

Called Business Support Payment Line today

Thank you all.

I'm very grateful to hear of people's experience.  There are always the few clients who leave everything to the deadline, no matter how hard I try to push them.

I telephoned this line and the person on the other end was so rude and obtuse that in my defending my client in the current economic situation he advised me I was not allowing him to talk and he was ending the call and put the phone down on me.

I will keep trying as I feel in this client's case it is worth it.  Sometimes life is not always a walk in the park and as an accountant I feel its only fair to assist those who always seem to walk on the grass whatever the weather, the signs and condition the grass is in.

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By GuestXXX
17th Mar 2015 17:55

.

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Stepurhan
By stepurhan
22nd Jan 2015 09:36

Special reasons

The tax payable 31 January is for income earned between 21 months and 9 months ago (so already extended credit versus someone under PAYE). The 31 January deadline for paying this tax is also well-known.

So what special circumstances are there for your particular client? Because, in all honesty, anyone could just cite the "current economic situation" as the reason for not being able to pay. It is a meaningless basis of argument, because it is essentially saying no-one is able to pay anything (we are all affected by the "current economic situation") In fact, if that was the sole basis of your argument, I think the HMRC operative getting annoyed with you is perfectly justified.

What you need is something that has happened specifically to your client between the time they earned the profits taxed and now. If they are doing a similar level of work now but say they cannot afford to pay, then that casts doubt on their general willingness to pay (again, a PAYE individual would be paying the tax out of their current income at a similar level to prior year. Why can't a self-employed person?). If you cannot justify your client being in (specific to them) dire straits now, then your only real hope is of getting a soft touch at HMRC. Good luck with that.

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By totallytopcat
22nd Jan 2015 13:23

Current economic situation

Lack of current fees

Lack of allowable borrowing

Rises in rents

Rises in heating and fuel costs

Rises in food costs

Unable to raise fee charges

The list can go on about 'current economic climate' and I can see that the 'fat cats' are also alarmingly replying!

 

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Replying to Ruddles:
Stepurhan
By stepurhan
22nd Jan 2015 15:34

Specifics, not generalities

totallytopcat wrote:
Lack of current fees

Lack of allowable borrowing

Rises in rents

Rises in heating and fuel costs

Rises in food costs

Unable to raise fee charges

The list can go on about 'current economic climate' and I can see that the 'fat cats' are also alarmingly replying!

Lack of current fees and unable to raise fee charges are your best bet. But you need to be able to give a reason why these things affect your client in particular, not everyone. Has he lost big customers and is in a competitive market? Not, is he too lazy to look for work and hasn't even looked at his fee charges in years.

Lack of allowable borrowing - Possibility, but HMRC will expect you to have actually looked at alternative financing. Just saying banks aren't lending is not really enough.

Rises in costs - Tough. Those affect everyone. Someone under PAYE can't say "my costs of living are a bit high this month. Can I not pay my tax and NIC?". The tax and NIC gets taken there and then, not over 9 months later, and they have to make do on the after-tax amount. You can go on about the "current economic climate" as much as you like. Your client made taxable profits last year, and should have made provision for the tax due. That is not being a "fat cat". That is just expecting people to pay their taxes on income earned. If there is a genuine reason they are making less money this year, and so have genuine cash-flow issues then fair enough. If they are making similar money to last year but expecting to be able to spend it all when employees on similar income are struggling to get by, I have zero sympathy.

 

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RLI
By lionofludesch
22nd Jan 2015 13:38

Only Real Hope

Actually, your only real hope is in convincing HMRC that this is the best way of getting their money.

I wouldn't be as harsh as Stepurhan - people often have unforeseeable and dramatic changes in their lives.  You can only provide for a limited number of risks.  I don't want to pry into your client's reasons and I take your comments at face value.

Everyone needs to realize that they have future tax debts.

Nevertheless, that's no excuse for rudeness.  I would've complained.  Nobody's entitled to speak sharply to me about a debt that isn't even mine.

 

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By jon_griffey
22nd Jan 2015 14:34

New hard line

I have phoned HMRC this week for a few clients.  In recent years it has been fairly easy to get a TTP.  But this time they are playing hard ball.

- why can they not pay?

- have they applied for a bank loan?  What did bank say?

- How much is on thier credit card?  What is the facility?

- do they have any assets that they can sell?

After clearing all that they said the client would have to ring up themselves with details of their income and outgoings.  This is to get payment over  a mere 3 months, which used to be very easy!

 

 

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Replying to DJKL:
RLI
By lionofludesch
22nd Jan 2015 14:45

Practical

jon_griffey wrote:

I have phoned HMRC this week for a few clients.  In recent years it has been fairly easy to get a TTP.  But this time they are playing hard ball.

- why can they not pay?

- have they applied for a bank loan?  What did bank say?

- How much is on thier credit card?  What is the facility?

- do they have any assets that they can sell?

After clearing all that they said the client would have to ring up themselves with details of their income and outgoings.  This is to get payment over  a mere 3 months, which used to be very easy!

And by the time all that's done, the three months is up anyway.

You've got to be practical.

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By GuestXXX
17th Mar 2015 17:56

.

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By Taxhurts
22nd Jan 2015 20:07

I've done three this week, all to be paid over 3 months starting Feb, no issue at all, arranged them on behalf my clients.  No questions even asked!?  Maybe try calling again and hope you get someone different?

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By Taxhurts
22nd Jan 2015 20:09

FYI I don't agree with it

Clients have known for ages (most are new clients to me but not new to SA) so they should have had the money ready - no excuse.  However this is brownie points for me, so I'll take it.

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By ianthetaxman
26th Jan 2015 15:19

time to pay

I've organised these in the past and will trying to do the same before the end of February for a couple of clients.  The reasons why someone can't pay (rather than won't) are to an extent academic - if they don't have the cash and can't generate it for whatever reason, it's better for all concerned that agreed payments are made rather than leaving debts to mount up and surcharges to be applied.

I've usually managed to obtain between 3 to 6 months to pay without too much trouble in the past, so it will be interesting to see how it goes this year - once got HMRC to agree for a client to pay nothing for a year and then settle the entire amount owed plus interest (which suited the client at the time).

 

 

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By iknell
28th Jan 2015 11:51

HMRC refused monthly payments

I have a client who due to ill health in the year after a good year didn't have the funds to pay IT, NIC and Student loan on 31/1/14.  They phoned HMRC, explained situation and offered to pay £800 a month to pay off debt.  HMRC refused saying it was too little (if would of taken best part of 2 years to pay off debt).  I just told client to pay as much as they could physically afford to HMRC via bank transfers so if they did try to take them to court they could show that they had made every effort to pay off the debt under the circumstances.

HMRC have now gone quiet so currently the plan is working.

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