Difficulty paying your tax

The Pre-Budget Report saw the launch of the ‘Business Payment Support Service’, a dedicated helpline for any taxpayer who believes they will have difficulty in paying their tax bills. It is primarily for self-employed people and companies, both large and small, and covers most taxes including income tax, corporation tax, PAYE, NIC and VAT.

Since its launch in November, it has apparently received more than 28,000 calls and granted 14,200 extensions to tax bill deadlines between 24 November and 4 January.

Taxpayers’ affairs can be discussed and arrangements can be agreed with the agent, as long as the 64-8 authority is in place, however HMRC have stated that if direct debits are to be put in place they may have to speak directly to the taxpayer.

Its aim is to tailor a payment plan to the taxpayer’s circumstances, which may be in the form of smaller instalments over a longer time frame. The taxpayer will qualify by being able to prove that they are:

  • in genuine difficulty
  • unable to pay their tax on time
  • likely to be able to pay if HMRC allows them more time.

Surcharges for late payments will not be charged on payments included in the arrangement, although interest will accrue on late tax from the original deadline as usual.

The proposals only apply to solvent taxpayers where this is the first time they have requested revised payment terms. A taxpayer who has already received a letter regarding an overdue debt or is in court proceedings are advised to speak to the tax office they have already received communications from.

At Mazars we have experience in negotiating payment arrangements and have recently achieved significant results for a large company regarding the renewal of their Construction Industry Scheme Gross Payment certificate and for another large company to pay £1.4m corporation tax in instalments.