Tax Debt – More time to pay?

If your company has had the skill and good fortune to survive the pandemic, now is not the time to pat yourself on the back (however well deserved), and kick back and enjoy the good times. An ONS report issued in June describes the issues: Approximately half (48%) of businesses currently trading reported that the prices of materials, goods, or services bought in April 2022 had increased from March 2022, while 23% reported that prices sold had increased across the same period; both figures are broadly stable compared with the increase reported from February to March 2022.

Furthermore, 29% expect to increase the prices of goods or services sold in June 2022. With energy prices being reported as the main factor for businesses considering to do so at 38%. Of businesses not permanently stopped trading, 6% reported that they were stockpiling goods or materials in late May 2022; the top three resources being stockpiled by these businesses were metals and materials (25%), food (23%) and manufacturing parts (21%). All of which suggests that the transitory nature of inflation may be misplaced.

HMRC Time to Pay Arrangements

Worryingly, for the month of April, every region of the UK (except for Northern Ireland) reported companies recording a decrease in turnover for the month (26%), then recording an increase (20%).
This may result in more companies struggling to meet their obligations in particular to HMRC. If this is the case, HMRC may allow you to make a Time to Pay arrangement. Time to pay arrangements are relatively common and basically allow a company some breathing space to restructure their debts. Crucially, they don’t involve debt forgiveness, but rather allow time for a company to recover and repay historic debts, whilst maintaining existing HMRC obligations.

Whilst HMRC do provide some guidance on when they will consider Time to Pay arrangements (see here),
it’s acknowledged that it’s very much an art rather than a science: how long, the quantity of repayments, flexibility around seasonal repayments and the information required to support granting Time to Pays seems to differ from department to department. However, we are here to help you. We can help prepare the information you need with HMRC and help with alternative planning going forward.

How can FD Business Rescue help?

At FD Business Rescue, we aim to rescue, recover and renew businesses that are experiencing financial difficulty. It is not always easy to see what the next steps are and what options are available. So don’t delay reaching out if your business is struggling. Please get in touch or simply call 0800 652 0002 for free advice and peace of mind.

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5 ways to rescue your business

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If you require help, get in touch or download our FREE guide with some top-tips you may not have considered.