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Coronavirus-hit businesses offered helping hand

Business owners who have fallen behind with tax payments as a result of the Covid-19 pandemic have been reassured that help is available.

Mark Bramall, Director here at Dyke Yaxley Chartered Accountants, says HM Revenue and Customs had been hugely accommodating in agreeing payment plans as businesses struggled under Coronavirus restrictions.

“Now though, HMRC have confirmed they are beginning the debt collection process and that they will be contacting taxpayers who have fallen behind.

“They have said they will take an understanding and supportive approach, but clearly there will be many businesses who are concerned about how they will afford to pay back the money they owe.

“HMRC say they will do everything they can to help businesses with temporary cash flow issues to survive – to achieve this, they will discuss affordable payment options, including a ‘Time to Pay’ payment plan or a short-term deferral.”

Mark says any businesses affected should consider taking professional advice on cashflow forecasting to get a clearer picture of their position.

“Cashflow forecasts can really help with negotiations with HMRC, particularly if you owe a large amount or need a longer repayment agreement. And preparing forecasts can help to identify really difficult cashflow pinch points on the horizon as a result of existing tax liabilities which may have been deferred previously but which are now due for payment.

“By working with a professional adviser, you can find a way to renegotiate payment plans or put the payments on hold for a short period if your circumstances have changed.”

Mark says business owners should also look at the new Debt Respite Scheme in England and Wales which helps people struggling to cope with the money they owe to take control of their finances.

“HMRC is part of this scheme, which means debtors can apply to a debt adviser for breathing space where creditors stop all enforcement activity, and all interest and late payment penalties stop.”

From September this year, if taxpayers refuse to discuss a repayment plan or ignore attempts by HMRC to contact them, HMRC may start to use enforcement powers to collect the debt including taking control of goods, summary warrants and court action, and even insolvency proceedings.

“We’d urge taxpayers who are struggling to make payments to take proactive action and not wait until HMRC starts the enforcement process – by seeking professional advice, you may be able to avoid serious consequences.”

 

Mark Bramall, Director.