Published: 27/01/2025 By Andrew Bailey
It is self-assessment tax season so individuals and their accountants are busy getting the returns in before the end of January.In the meantime it does not mean HM Revenue & Customs have taken their eye of companies and what they should be paying for VAT, PAYE/NIC and anything else.
I have been communicating with HMRC’s Enforcement and Insolvency team recently on a few cases. This is the team that deals with a file before it gets passed to their solicitors to pursue.
It is rare that HMRC are not a creditor on any case we deal with and the above team generally deals with those cases where they have pursued a liability for a prolonged period and it has not been resolved whether via repayment or a payment plan.
When you call this team the first thing they say (after getting through security) is “are you calling to make payment in full today?”
I do wonder how many times the answer is “yes”. I always start with a "no".
As an insight into their approach, once a file is with this team then they will continue enforcement until the liability is paid in full or a time to pay arrangement is agreed.
It is important to be aware that they will not stop enforcement when discussions are ongoing and it is only once terms are agreed that they will stop.
If you dispute the liability they will also still continue to pursue the liability. I was advised that it was expected that the liability calculated by HMRC will need to be paid in full in the first instance. If a dispute is accepted by HMRC after payment then HMRC will give the company credit for the difference.
HMRC will not just look at a payment plan from a commercial perspective. They have policy shaped by public interest and they will consider the compliance history of the company. Do not expect to have a time to pay arrangement accepted if you have returns outstanding. They will also factor in whether the company has defaulted on arrangements previously, what is the compliance history like (ie. returns submitted and payments made previously) and whether there are loans repayable to the company from connected parties including the director.
I have to say that I have found their team fine to engage with and you can understand the approach they take. I may change my tune mind you if I don’t get my way with the current cases though!
We are seeking time to pay arrangements whereby we look to pay the outstanding liability in full but over an extended period whilst also ensuring that current returns and corresponding payments are made on time. It is the best outcome for all parties so hopefully we can make it work.