How to Secure a Time to Pay Arrangement with HMRC

Invoice Factoring company Uk

Allowing You Time to Pay Your Debts

Being in business can be tough, particularly in today’s economic climate, and it’s not unusual for businesses of any size to struggle with cashflow issues. From late paying customers to overheads and staffing costs, managing your cashflow can take up a lot of your time.

If you’re a company director, you’ll take responsibility for your company’s debts. Unfortunately, this means you could be held liable if there are cashflow issues or if the business fails. Often, you’ll be asked to personally back any loans and cover the shortfall on lending if the company goes under. Missed payments can negatively impact your company’s credit score, which can make it difficult to obtain finance in the future, leading to a downward spiral of debt and yet more debt.

Is Your Company Facing Insolvency?

If your company owes more than what it has coming in, is unable to pay its debts on or before the due date (for example, monies owed to HMRC or creditors) or if a creditor obtains a CCJ against your company; then you could be facing insolvency.

If you’ve fallen behind with payments to HMRC, then you may be able to secure a Time to Pay Arrangement. This is essentially to assist businesses with VAT or tax debts to repay them in instalments, usually over a period of 6-12 months. During this time, the balance of the debt must be brought back to zero.

How to Get a Time to Pay Arrangement

HMRC debt needs to be addressed promptly and in order to get a Time to Pay arrangement, you will need to provide evidence that your company will be able to repay its taxes in full over the agreed time frame. In some cases, HMRC will allow companies longer than 12 months to pay their debts, and payments are generally made by direct debit.

HMRC will consider the line of business you are in, as well as any history of time to pay arrangements and your overall tax compliance, when considering whether to allow you to pay in instalments.

What are the Alternatives to a Time to Pay Arrangement?

It’s not all bad news if your company is refused a time to pay deal though as you could seek professional advice about your HMRC debt or ask HMRC if they will allow your business to enter into a Creditor’s Voluntary Arrangement (CVA). This essentially means you can make payments towards your debt over a longer period (normally up to 5 years).

Other options include seeking finance from alternative sources (which can prove challenging if your company is already in debt and your credit rating has been affected) or seeking advice on invoice factoring.

Have You Considered Invoice Factoring?

When it comes to managing cashflow, invoice factoring can help you to get on top of debt. Most importantly though, it can stop your firm from falling into debt in the first place. It is a low risk, cost-effective means of ensuring your company’s cashflow is stable.

Invoice factoring funders can release the equity in your unpaid customer invoices within 24 hours (usually up to 90% of the value of invoices), which means you’re never left waiting for invoices to be paid. This means you can pay your contractors on time, as well as ensuring that payments to HMRC for tax and national insurance purposes are dealt with in a timely manner.

Simply Factoring Brokers have been a leading invoice factoring broker for many years, providing services across a range of sectors including service industries, haulage and construction and manufacturing. Invoice factoring can benefit firms of all sizes, particularly those undergoing a period of growth or firms seeking finance who are concerned about their cashflow. If you would like to enjoy improved cashflow and avoid falling behind with payments to HMRC, get in touch with us today.

To find out more about what’s involved, just call us on 0333 772 1558 or email

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