The BCR Insolvency Blog

What To Do When You Can't Pay HMRC Debt

Posted by Chris Knott on 22-Feb-2018 12:28:49

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There are many reasons why business owners can’t pay HMRC debts as and when they fall due. They could, for instance, have been going through a lean period for some time and therefore haven’t been able to aside any funds in anticipation of their tax liabilities.

One of the most popular reasons is because they quite simply have been sticking their head in the sand with regards to their forthcoming tax bill.

Whatever the reason though, the first – and most necessary action – to take, is to contact HMRC directly and let them know you can’t pay. You may be able to negotiate a Time To Pay arrangement

What If It’s Gone Too far & HMRC Are Employing Debt Recovery Tactics?

HMRC do outsource their debts to private companies who, in turn, regularly send in bailiffs to recover an unpaid debt. HMRC also directly employ field agents who are empowered to take possession of business assets, such as vans and machinery. The assets may not be sold straight away, but HMRC can seize them, effectively holding them as security for any payment outstanding.

What Happens If HMRC Takes Me To court?

Another line of action is for HMRC to apply to the High Court for a winding up order for any company which owes it money. This is also referred to as compulsory liquidation.

The Best Approach When You Have Tax Arrears

By far the most effective way to deal with outstanding tax debt is to contact HMRC in an effort to negotiate paying back the total amount in instalments. If this isn’t possible over a 12-month period, then the next step could be to enter voluntary liquidation.

Speak To One Of Our Advisers

If the above scenario sounds uncomfortably familiar and you’re feeling anxious about a forthcoming tax bill then please contact our team for help and advice? We can be reached via telephone on 0333 014 3454. You can also check out our FREE Guide to Business Recovery and Turnaround

Download Our Free Guide To Business Recovery And Turnaround

Topics: Debt Recovery, HMRC

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