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PAYE Arrears and VAT Arrears
Not paid the deductions of PAYE and NIC across to HM Revenue & Customs?
Well, as you will now know that is something that they do not like!
Basically, its tax payer’s money and the collectors are there to collect it.
HMRC (what was the Inland Revenue and HM Customs & Excise previously as
separate government organisations) now has a super dooper central database
and can spot slow payments or missed payments much more quickly now.
If your company is not paying PAYE & NIC on time then it is probably
insolvent, so see our guide to “Is our
company Insolvent”.
Non payment of tax is a failure to comply with the tax legislation and also
signifies publicly (loud and clear to HMRC) that the company is insolvent.
So, you need to act properly and deal with this serious threat to your
company.
PERSONAL LIABILITY
Remember that if the company is insolvent you could be personally liable for
the debts, if you continue to trade, whist doing nothing about the problems
that it faces. Wrongful trading can be a real problem where ongoing tax
arrears are building up and the company then enters
insolvent liquidation.
So, act carefully, keep notes of any decisions and always write names of
people you speak to at HMRC down. Take advice from experts, above all act
promptly as delay may just lead to more problems for you as directors.
What are the Available Options?
Once you have read more about the problem on our guide pages like
Is our
Company Insolvent?, Directors Do’s and Don’ts and
Warning Signs?
then the options you have available are:
1. Trading out, visit this
guide to how to deal informally with the problem. This can avoid formal
approaches like
Voluntary Liquidation,
CVA,
Compulsory Liquidation
and Administration.
1.1. Tips…
1.2. Don't wait until legal actions have been taken against the company to
ask for a "time to pay" deal with HMRC.
1.3. Try to plan the cashflow of the business well in advance - you have a
legal obligation to do this! If the directors do not think the company has
sufficient cash to trade they should consider the obligations and options
and plan a way forward.
1.4. Don't be too ambitious in planning repayment; you will have bad months
as well as good, so be careful with the cashflow forecasts.
1.5. Worried about legal actions? go to that page for more details.
1.6. Ask for 18 months to pay back PAYE, knowing that you will probably get
6-9 months at most.
1.7. Ask for 6 months for VAT.
1.8. If your cashflow forecast says you cannot afford that fast a repayment
programme, then consider a company voluntary arrangement - CVA.
2. CVA,
We think that, if the company is viable but insolvent, this is the most
powerful way of dealing with a serious cashflow problem and tax arrears
(which proves insolvency).
2.1. Tips, HMRC supports well proposed CVA's.
2.2. Secondly, you do not have to pay back all of the debt.
2.3. Thirdly you remain in control.
3. Do Nothing!
3.1. Actually this will lead to:
3.2. Bailiffs, Sheriffs, walking possession, distraint and more worry - see
here for How to deal with Legal Actions
Don't wait too long to get professional turnaround help. Call the experts on
01289 309431 or 0800 9700539
Please call or email us for further details
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