What do you do if you can’t afford to pay your business taxes?
By Mr Bankruptcy
5th June 2023
If you’ve fallen behind with paying your corporation tax, it’s important you understand the options available to you to so you can work to resolve the matter.
What happens if I miss a payment?
Corporation tax is payable on the profits of your business and on capital gains with the figure calculated from the year-end accounts that you submit. Any tax owed will be payable 9 months and a day after the date your tax accounting period ends.
HMRC will send a reminder and warning letter that your payment is overdue, but you will receive charges from the moment your payment is late and you will also be charged interest on the money owed.
If you haven’t contacted HMRC already to inform them that you are unable to pay your tax bill, it is important to do so quickly. They will want to see that you’re proactively trying to work with them to address the problem and that you aren’t just trying to avoid paying tax.
If your tax bill remains unpaid, HMRC has options for recovering the money. To understand the impact of these options, it’s important to get professional advice.
Options for tax bill payment
To repay or resolve tax debt, there are several options:
- Time to Pay arrangements: An agreement may be reached with HMRC to allow tax owed to be paid over an agreed period of time, but only if they believe you can repay what’s owed while also keeping up with your ongoing tax obligations.
- Formal insolvency proceedings: If you are unable to pay your tax bill you may need to consider formal insolvency proceedings. This could be a Company Voluntary Arrangement, which is a repayment plan for a percentage of your debts, but it has to be agreed to by the majority of your creditors. There’s also Creditors Voluntary Liquidation where company assets are liquidated to repay debts.
Is it time to take action to deal with my tax bill problem?
If you know that you will be unable to pay your corporate tax bill or you’re already behind with your payments it’s important not to ignore the situation, no matter how stressful it seems.
If you take no action HMRC may commence a winding up procedure – to avoid that path you should seek advice quickly. With professional insolvency support you can understand the best options available to you and the implications of each.
Only then can you choose the right solution for your circumstances and start addressing the burden of debt, which affects not just your finances, but also your health and wellbeing and those around you.
James Rosa Associates
James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to support individuals and business owners/directors who face unmanageable debt from any cause, including that tax demand, or who are involved in civil or commercial disputes.
Our services include:
We are fully authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.
Do you qualify for a free debt consultation
If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.