Time to Pay over 15 months – is it possible with HMRC

[LGempner]

Hi,

We’re a small company with a £7K PAYE bill due this July (not overdue yet).

Due to serious cashflow issues, we’d need to set up a Time to Pay plan over 15+ months.

I know HMRC typically offers up to 12 months — has anyone had success requesting longer terms?

If so, could you share what kind of info or documents did they ask for?

Just trying to be prepared before calling.

Thanks for any tips or experience!

 

[Lisa Thomas]

Yes the are still offering longer terms. a couple of my connections just got 2 years.

£7k is not much of an ask. It's the big ones they will be concerned about. What you need to ensure is that all of your tac returns are up to date and you can continue to manage the current tax liabilities, not just the arrears.

Have you identified why the arrears/cashflow shortfalls have incurred? Have you been able to fix these problems?

 

[Porky]

@LGempner
The way things are currently if they dont give 24 mths a heck of a lot more companies will go under. So they will likely agree to it.

BUT, dont rush to sign up to 24 mths repayment plan, you need to check affordability and ensure you can repay that, if you have to let staff go you may have a short term increase in costs and need to factor that in. This is the number one challenge for small businesses, its not easy to offload staff and see a quicker financial benefit.

I would advise you to go through your numbers with your accountant, take your time to check and double check how you expect trading to go over the next year. Better to have £14k on time to pay that you can afford after changes made to the business plan than £7k you rush into and struggle to keep on top of it.

I really wish you well, its real tough out there at the moment - good luck

 

[Paul Kelly ICHYB]

Start showing good will and pay something now and on a regular basis!

 

[Paul Kelly ICHYB]

Start showing good will and pay something now and on a regular basis!

 

[WiseProcurement]

Hi,

We’re a small company with a £7K PAYE bill due this July (not overdue yet).

Due to serious cashflow issues, we’d need to set up a Time to Pay plan over 15+ months.

I know HMRC typically offers up to 12 months — has anyone had success requesting longer terms?

If so, could you share what kind of info or documents did they ask for?

Just trying to be prepared before calling.

Thanks for any tips or experience!

You should be ok for 24 months. Depending if the cash flow issues have affected your credit, you could always get a 24 month cash flow loan.

There are specialist Tax loans available but it’s usually for Vat, Corporation Tax and Self Assessment, Vat loans are spread over three months, the other are up to 12 months. A lot of people are starting to use these loans, normally no PG’s under £150k as well. HMRC are paid directly and you pay the lender in instalments.

Good luck getting it sorted

 

[Paul Kelly ICHYB]

Is getting into debt to pay debt a wise thing?

 

[Mark T Jones]

Is getting into debt to pay debt a wise thing?

No.

And yes.

It's complex. Let's not forget time to pay with HMRC is debt. (TBH probably easier/softer than the facilities available)

In the broader context, there are legitimate/genuine reasons where a VAT loan may be a good solution fir a one-off scenario.

The downside is the slippery slope, where it becomes a cover or an excuse for bad planning and management.

I've made a clear decision not to involve myself in this market because unfortunately I believe the bad planning market is bigger than the legitimate one.

 

[DontAsk]

Is getting into debt to pay debt a wise thing?

Depends if, down the line, you need to take on a 3rd tranche of debt to repay the 2nd and 1st debt.

Needs very careful (accurate) planning and forecasting.

 

[Mark T Jones]

Depends if, down the line, you need to take on a 3rd tranche of debt to repay the 2nd and 1st debt.

Needs very careful (accurate) planning and forecasting.

One of my connections is a second- charge lender. They do some affordability assessment, but rely heavily on the borrower's word that they have researched their plan.

They told me - only last week - that their biggest source of business is currently companies that have taken on multiple short-term loans and are consolidating them.

That's not necessarily bad (but does suggest bad planning) - what's really bad is when those businesses take on short-term debt to meet the secured loan repayments

 

[Lisa Thomas]

You should be ok for 24 months. Depending if the cash flow issues have affected your credit, you could always get a 24 month cash flow loan.

There are specialist Tax loans available but it’s usually for Vat, Corporation Tax and Self Assessment, Vat loans are spread over three months, the other are up to 12 months. A lot of people are starting to use these loans, normally no PG’s under £150k as well. HMRC are paid directly and you pay the lender in instalments.

Good luck getting it sorted

It's madness that someone would lend £150k unsecured to an insolvent entity...

 

[WiseProcurement]

It's madness that someone would lend £150k unsecured to an insolvent entity...

Hi Lisa,

They won't just lend to anyone, the business would have to be in decent shape. The lender can see if they are just in a short term bind and will lend accordingly. You probably know what it's like, many businesses are very profitable on paper but have bugger all cash in the bank! It's often due to late payments or an big, unexpected expense causing a temporary issue.

 

[Lisa Thomas]

Some of the calls I have taken have been from people who have lent to just anyone...I recently had to explain to someone that they had lost over £100k because the debtor had gone into Administration and their debt was unsecured...

 

[Mark T Jones]

Some of the calls I have taken have been from people who have lent to just anyone...I recently had to explain to someone that they had lost over £100k because the debtor had gone into Administration and their debt was unsecured...

One of my fellow brokers had one go down for £250 without repaying a penny


I suspect criteria will be tightening pretty soon

 

[Lisa Thomas]

£250? or £250k?

 

[Mark T Jones]

£250? or £250k?

Ha £250k (I only think in thousands)

 

[Lisa Thomas]

Ha Ha. Wow that was a huge risk/loss! Someone has too much money to burn...

 

[Mark T Jones]

Ha Ha. Wow that was a huge risk/loss! Someone has too much money to burn...

Yip - and burn it they will.

I've been around the block a few times and seen literally hundreds of 'sexy' new facilities come and go.

No PGs
Minimal underwriting
Soft terms

etc etc...

Without fail they either disappear or morph to a more conventional model.

 

[Lisa Thomas]

I advised a spate of funding circle debtors pre covid. One after one owed over £100k completely unsecured...I think they might have firmed up on their lending now, though.