Time to pay deal brokered despite a missed payment

20 April 2015

We were instructed to help a legal advice firm which specialised in mortgages. It was one of the first to operate under the new Alternative Business Structures (ABS) i.e it did not need to be owned by lawyers. Sales were starting to fall from previous levels of £600k pa.  

At time of engagement there was already a time to pay arrangement with HMRC. The company was unable to meet the remaining payments under the existing deal. PAYE payments were up to date and VAT arrears was £16,471.

However the company was not in a position to pay its next VAT quarter of Corporation Tax (CT) liability due for payment in May 2015 but relating to historic period. CT liability was £13,157.

HMRC accepted the TTP proposals, although neither due for payment, they both related to a historic period.

HMRC agreed the payments over 1 year, with low installments over the first three months increasing for the remaining 9 months. The installment pattern is £1k per month for three months, from April to June and thereafter £4,310 for the following 9 months from July to March 2016.  

Categories: Turnaround