All businesses and self-employed individuals in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s ‘Time To Pay’ service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
These businesses can contact HMRC’s new dedicated COVID-19 helpline for advice and support. To ensure ongoing support, HMRC have made a further 2,000 experienced call handlers available to support firms and individuals when needed.
If you run a business or are self-employed, and your ability to pay is being impacted by the Coronavirus, please phone HMRC on 0800 024 1222 for help and advice. HMRC will discuss your specific circumstances to explore:
- agreeing an instalment arrangement;
- suspending debt collection proceedings; and
- cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.
Our initial insight is that there is significant inconsistency as to how requests are being dealt with – in some cases these are being granted with relatively high level discussions whereas in others they are being scrutinised extensively. This is likely due to quantum of staff HMRC has redeployed to the Coronavirus helpline, without sufficient training or experience, albeit we would envisage that this will be rectified soon.
This pandemic is unprecedented, however based on our experience during the early stages of the financial crisis in 2008, HMRC are likely to be very accommodating to initial requests. Whilst such leniency is welcome, each individual or business should consider how forecasts may look in the next six months to two years. It is vital that cash flow forecasts are robust and achievable over longer periods and stress tested with different scenarios.
Have other avenues been explored? There are various other government assistance schemes currently available, such as the Business Interruption Loan Scheme, the Coronavirus Job Retention Scheme or the grant schemes. At some point HMRC will no doubt determine that the wider economic position has eased and tighten the conditions for Time To Pay arrangements.
In addition, HMRC has also introduced two temporary deferrals – VAT Deferral and Self Employed Income Deferral, which may avoid the need to request a Time To Pay arrangement.