Time to pay Tax, VAT, PAYE and CIS
If you need time to pay Self Assessment Tax, Corporation Tax, VAT, PAYE and CIS you need to make an arrangement with the creditor HM Revenue & Customs.
There are two distinct levels of tolerance for late payment
Where tax is assessed on your income and profits
Personal tax
Corporation tax
Where you act as a collecting agent for The Crown
VAT
PAYE
Construction industry scheme CIS
In these situations you are viewed as having collected the money and then withheld it from payment.
Although you need to bear these differences in mind, the attitude of HM Revenue & Customs is similar in both situations. You need to telephone whoever has sent you the demand and reach an agreement with them.
If you are able to pay the arrears before the due date for the next amount, this will normally be readily agreed.
If you need more time than this to pay you need to take the later payment dates into consideration with your offer.
HM Revenue & Customs wish to avoid being involved in the finance of your businesses and you are expected to use available funds and consider normal lines of borrowing in order to pay taxes. They will always charge interest and, in some cases, late payment may incur additional amounts of penalties.
Self Assessment Budget Payment Plan
If you need both time to pay an existing liability and wish to progress onto making regular payments in advance by Direct Debit telephone the HMRC Payment Helpline 0845 366 1204. see also Paying Self Assessment Tax - By Direct Debit - Budget payment plan
Business Payment Support Service
There is a formal initiative for businesses who anticipate needing time to pay. By entering into a time to pay agreement in advance of the due date for VAT and income tax, and adhering to the terms of the agreement, you can avoid VAT late payments penalties and income tax late payment penalties. VAT and tax returns must be filed on time to avoid late filing penalties. The contact telephone number is 0845 302 1435 and the full details are at http://www.hmrc.gov.uk/pbr2008/business-payment.htm
The scheme started November 2008 and by the end of December 2010: 395,400 proposals were agreed (96% of proposals) and 16,100 were refused. It is estimated that 86% of tax agreed under these arrangements had been paid by December 2010.
Dealing with collection offices
HM Revenue & Customs staff can normally be expected to act positively to get the problem solved, however, you may come across individuals who adopt a particularly adversarial and sanctimonious attitude. If this should happen, and you consider that you have acted reasonably and positively, do not be put off by such an encounter and try to reach agreement with someone else.
HM Revenue & Custom offices continue, over many years, in a state of constant reorganization. The telephone number which you call may connect with any one of a number of offices throughout Great Britain. There is a tenancy to issue letters based on figures on computer systems quickly followed by bailiff action. If you have made arrangements to pay, it is important to document this, preferably in writing but at least by reference to the names and telephone numbers through which arrangements have been made.
Bailiffs
Bailiffs act independently on instruction from a tax office. If HM Revenue & Customs HMRC are threatening to send bailiffs, you need to reach agreement with that tax office before the bailiff action can be discontinued. If you act reasonably and positively following a first visit or threat, matters can normally be resolved.
Taking away of possessions is not normally the first resort of a bailiff. In more extreme situations they may take a walking possession which means that you are not free to dispose of that possession until you reach agreement with the tax office. They do not have right of entry into your premises but if you let them in they may exercise possession rights. This draws them to exercise possession on vehicles outside the premises or to threaten such action.
Only possessions of the specific taxpayer can be threatened with seizure. If it is Corporation Tax or other company liability, only company possessions can be involved and not those of the director personally.
This is particularly important if they call at your house.
Where it is a personal liability of a husband, the wife's or other residents' possessions cannot be threatened with seizure.
Bailiffs normally act positively to get the problem solved, however, they act on a narrow instruction; they either collect or do not collect, they cannot negotiate with you. They are paid by the visit and as a proportion of funds collected which can result in a more aggressive attitude. Their objectives diverge from those of the tax office, they have no interest in your reaching agreement with the tax office because this takes business away from them. It can lead them to make misleading and inaccurate statements in order to collect money. If this should happen, and you consider that you have acted reasonably and positively, do not be put off by such an encounter and reach agreement with the tax office as soon as possible.
If you have been frightened by the assertions of a bailiff, try to take time to consider them rationally and consult your accountant or solicitor. Insolvency action can only be conducted by HMRC Worthing Office. A bailiff cannot "make you bankrupt" or "put you into liquidation".
HMRC Worthing Office
Worthing is the Debt Management Enforcement & Insolvency office. Cases are referred here when HMRC consider that matters have moved beyond normal collection parameters. Even so, reasonable proposals for payment will still be considered.
However, at this stage the tax payer may need also to consider the insolvency options of: liquidation if a company or bankruptcy if an individual.
Worthing staff will try their best to avoid insolvency proceedings if this should be your wish.
Conversely, if your case is not with Worthing, HMRC are not taking active insolvency proceedings against you.
Avoid distressing dealings with tax collectors; talk to us about time to pay taxes.