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HMRC have issued some fresh policies regarding their collection of tax debts. They understand that a vast majority of customers pay their tax in full and on time but where customers are unable to pay on time, they want to work with them to settle their affairs.
Aiming to make things as straightforward as possible HMRC say that:
‘There is no standard Time to Pay arrangement. We discuss a customer’s specific financial circumstances, look at what they can afford to pay, and then use that to work out how much time they need. There’s no upper limit on the amount of time that someone can have to pay, but we will look for customers to repay their debt as quickly as possible while maintaining affordablepayments. We start by asking business customers about their company’s financial position. As with our individual customers, it’s really important that we have an open and honest conversation to understand what the business can afford to pay. Business finances are often complex, so we ask our business customers to calculate what they feel they can afford to pay and submit their best proposal to us for review. We then ask questions about their proposal, to make sure it’s affordable, while paying off the debt as quickly as possible. The length of the arrangement will depend upon how much the business owes and their financial circumstances. As with all our Time to Payarrangements, this will be reviewed regularly and can be adjusted over time.They can be shortened where a business’ financial position improves or lengthened if their financial position worsens but remains in a position to recover.
If you have a tax debt, HMRC will always try and contact you by either phone, post or text message so they can discuss a way forward with you. A timely response is required to let HMRC know that you want to work with them to resolve the debt, as opposed to refusing to pay.
If you are struggling to pay HMRC and other creditors, they should consider seeking independent debt advice. The Money Advice Service can give more information about where to get free debt advice.