If you're a small business owner struggling to pay your self-assessment, corporation tax, VAT or other tax bills, HMRC's Time to Pay scheme could help you.
The scheme allows businesses and individuals to spread the cost of their tax bill over a period, making it more manageable.
There are several things to consider before applying for a Time to Pay arrangement, including your ability to pay the full amount within the specified time frame, and whether you have any other outstanding tax debts.
It prevents you from falling behind your tax bills and gives you extra time to pay.
It’s important that as a business owner, you understand how the scheme works and what the eligibility criteria are.
Everything You Need To Know About HMRC’s Time to Pay Arrangement.
What is HMRC’s Time to Pay arrangement?
HMRC’s Time to Pay arrangement is a payment plan that allows businesses and individuals to spread the cost of their tax bills over a period.
The arrangement is designed to help those who are struggling to pay their tax bill in full and can last for up to 12 months.
How does the Time to Pay arrangement work?
If you’re struggling to pay your tax bill, you can contact HMRC to discuss a Time to Pay arrangement.
You’ll need to provide details of your financial situation and explain why you’re unable to pay the full amount.
HMRC will then agree on a payment plan with you, which will spread the cost of your tax bill over a period of time.
The arrangement will be tailored to your individual circumstances, and you’ll be required to make regular payments until the debt is repaid in full.
What are the eligibility criteria for the Time to Pay arrangement?
To be eligible for the Time to Pay arrangement, you must:
- Be up to date with your tax returns
- Have a genuine reason for not being able to pay your tax bill in full
- Be able to afford the payments outlined in the payment plan
- Not have any other outstanding tax debts
- Not have used the Time to Pay arrangement in the last 12 months
If you meet the eligibility criteria, you can apply for the Time to Pay arrangement by calling HMRC’s dedicated helpline or by filling out an online form.
What are the benefits of using the Time to Pay arrangement?
There are a number of benefits of using the Time to Pay arrangement, including:
- Avoiding late payment penalties
- Preventing you from falling behind on your tax bills
- Giving you extra time to pay
- Tailoring the payment plan to suit your individual circumstances
Would Time To Pay Arrangement Harm My Finances?
There are a few drawbacks to using the Time to Pay arrangement, including:
- You’ll be required to pay interest on the outstanding debt
- The arrangement will show up on your credit report
- HMRC may take action to recover the debt if you fail to make the agreed payments
If you’re struggling to pay your tax bill, HMRC’s Time to Pay arrangement could be a helpful solution.
It’s important to understand the eligibility criteria and how the scheme works before you apply.
If you're interested in applying for a Time to Pay arrangement, you can do so online or by calling HMRC's dedicated helpline. But it`s imperative that you need to decide if you actually need to apply for the scheme before paying any interest rates for your overdue tax returns and alter your credit record. Best option is to ask an accountant who knows your financial history and discuss it in-depth before paying your corporation tax return, VAT and other overdue tax bills with Time To Pay Management.