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Stories Tagged ‘HMRC arrears’

HMRC are trying to agree 9 month repayment plans with businesses for PAYE and VAT arrears. However, it is possible to negotiate better and more reallistic terms.

In my dealings with businesses as an Invoice Factoring broker I come across a lot of businesses who have some form of arrears with HMRC. Often the invoice finance company will put a condition in their offers that the business must have a time to pay agreement in place for these arrears.

A time to pay agreement is a formal repayment plan that has been agreed by HMRC.

Unfortunately HMRC in recent months have been very aggressive when negotiating these and have been advising everyone that the maximum term is 9 months. This is often unrealistic and in most cases simply postpones the winding up petition.

So why do businesses agree to these repayment schedules that they can’t meet? I think often they are feeling the pressure. They are typically not used to dealing with the big beast that is HMRC and are worried they will wind them up. The requirement from the invoice finance company to have a repayment plan in place also adds to this pressure. A delay in obtaining the finance could mean business failure and as such there is relief in agreeing to any repayment plan.

I was speaking to a company that specialise in negotiating better terms for these agreements and they are negotiating between 18 months and 3 years. Their emphasis is in proving the repayment plan is what will work and is realistic. Their track record helps as they have a relationship with HMRC but it can be done by individual businesses. It is important to have cash flow forecasts to support your argument but it is well worth standing your ground to reach a conclusion that is ultimately more beneficial to both parties.