Struggling to pay VAT due to temporary Cash Flow problem.

[minnehoma]

My company has just hit a flat spot with regards to Cash Flow and this means we are struggling to find the money to pay our VAT return.

This has all come about due to a slow trading month of January coupled with some disputes over payments due to us which means we haven't collected the cash we required in January. These monies are due in the next week or two but this does not help us as the VAT return and payment is due on the 7th Feb.

The fact that we have just paid our Corporation Tax bill also has put a strain on the finances.

Are there any options open to us with the HMRC to stagger the payments of the VAT?

I remember speaking to them a couple of years ago and they made me feel like a criminal when I asked for time to pay.

 

[Walkol]

In my experience, if you phone them now you have a good chance of gaining an extension, I wouldn't delay it any further though, the earlier you call them the better. Offer them what you can as payment now (as much as you realistically can, and make sure you absolutely have the funds to do so) with the rest at the end of the month.

Be absolutely 100% sure you can meet the payments you agree however, you don't want to default on a payment plan with them.

 

[MyAccountantOnline]

I remember speaking to them a couple of years ago and they made me feel like a criminal when I asked for time to pay.

You will find some HMRC staff are like that - it SO depends on who you speak too.

Have a read of this it should help.

 

[Anna Chandley]

You might also wish to consider using the cash accounting scheme in the future, see here for details. On the cash accounting scheme you only have to pay over the VAT on sales once you have received the money.


Anna

 

[daniel.mobbs@salixaccount]

The cash accounting scheme as Anna says is a very good option, plus the Flat Rate Scheme is another to research. Both schemes have their limitations based on turnover for eligibility.
Calling HMRC and spreading your VAT bill over 3 months should be pretty simple if you've had a good history with them. I wouldn't suggest calling the Business Payment Support Service right away and call the VAT Helpline first on 0845 101 9000.
There was a time when HMRC was 2 agencies and of the 2, VAT was the one you didn't want to be in debt with but times have changed and the VAT office is far more approachable. Good Luck.