Over the last few weeks, businesses have been receiving letters from debt collection agencies on behalf of HMRC.
This may not be surprising, given that the process was put on hold during the COVID-19 pandemic last year. However, these letters have been sent out to all businesses that owe money to HMRC – even ones that have Time To Pay (TTP) arrangements in place.
It appears that HMRC has outsourced small debts to debt collection agencies. This is likely to be on a ‘no fee’ basis, with the collectors keeping a portion – e.g., 10% - of the funds that they recover.
However, it’s unclear as to the reasoning behind this.
Due to the unprecedented financial impact on businesses during 2020/21, HMRC temporarily halted collections activity. Now that it is recommencing, it could be possible that HMRC is prioritising larger debts internally – with collections agencies taking charge of debts smaller than £5,000 or even £10,000.
What if I already have a TTP agreement in place with HMRC?
If you already have a TTP agreement in place with the tax office and you’re keeping up with payments, then you don’t need to worry. The letters appear to be a ‘one size fits all’ document, and WE BELIEVE no action will be taken if you don’t respond to it. BUT BEST TO MAKE CONTACT TO TELL THEM YOUR TTP IS UP TO DATE
What if I can’t afford to make the payments?
If you’re struggling to make your TTP payments, it’s worth contacting HMRC directly to discuss this.
If you believe that your company is still viable, and you’re unable to adjust your TTP agreement, then there may be alternative funding options available to you. Find out more about the types of finance available here.
If you’d like to discuss the right funding option for your company, or if you have any questions, please don’t hesitate to give us a call on 020 7760 7524.
Category: HMRC Time to Pay Arrangement
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