How does coronavirus impact HMRC's Time To Pay scheme?

HMRC Time To Pay

What is it?

Small and medium-sized businesses who can’t afford to pay their tax bills can ask HMRC for a “time to pay” agreement to suspend debt collection. All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs. During the pandemic, the usual 3.5% annual interest on deferred payments will be scrapped.

Typically, successful applications will be granted 6-12 months extra to pay what is owed, however during the coronavirus crisis longer time periods could be offered. According to HMRC, there is no upper time limit with this scheme.

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What evidence will I need to supply?

In order to make your claim as strong as possible, you'll need to put forward a reasonable repayment proposal with supporting evidence.

Strong claims typically include:

• Forecasting sales
• Evidence of efforts to cut costs
• Proof that you are determined to settle your outstanding taxes

Although strong claims typically include this information, each application will be assessed on a case-by-case basis due to the significant disruption that coronavirus has caused.

What will help my application?

HMRC will consider a number of factors when deciding whether to grant you a Time To Pay agreement. These include:

• Whether you've complied with tax rules and regulations in the past
• Your business industry
• Whether you've had (and kept to) previous Time To Pay arrangements
• If your business has been affected by coronavirus (this will be assessed on a case-by-case basis)

How do I apply?

To start a Time To Pay case review, call HMRC on 0300 200 3835.