Help to pay your tax bills
In the current uncertain trading environment and with tax holidays coming to an end, many small businesses will be wondering how they can manage their tax liabilities with reduced cash flow.
Every business is different and if you are open and honest with HMRC, they can provide a tailored payment plan to suit your circumstances.
Time to Pay
Where a business or an individual is facing difficulty in making a tax payment, there is the option to set up a payment plan with HMRC, which they call Time to Pay, which is based on your current financial circumstances.
Any tax, duty, penalties or surcharges can be included in a Time to Pay arrangement.
There is no standard Time to Pay arrangement and each plan is tailored to your individual needs. HMRC will discuss your specific financial circumstances, look at what you can afford to pay, and then use that to work out how much time you need to pay off any outstanding tax debt.
There’s no upper limit on the amount of time that someone can have to pay, but the emphasis will be on the shortest time possible. However, HMRC’s stance since COVID-19 has been more lenient, and even though tax holidays look to be drawing to an end (they may get extended), it has been encouraging to see HMRC responding empathetically with Time to Pay extension requests.
Engage with HMRC as soon as possible
It is important to respond to HMRC’s letters, phone calls or SMS text messages promptly, otherwise HMRC can enforce powers to collect any tax debt due by you. For example, HMRC have new powers to access, review and retrieve funds from your bank accounts, both business and personal, and can seek powers to review your assets, including your pension as a very last resort.
HMRC are happy to work with you as long as you keep them informed and don’t delay in contacting them when tax payments are due.
Cash flow management
Anyone who has started their own company can tell you that cash flow management is extremely important and that is the case even if you are very profitable growing business or just starting out.
If you don’t have an eagle eye on expenditure and credit control and haven’t accounted for unexpected costs arising, you business could easily run out of money and be at risk of failure.
No matter how strong your turnover is, if your cash flow is negative, it will be very hard to maintain the level of service or care in your business and you will run into serious problems.
During these uncertain times, cash flow forecasting is increasingly important, at the very least looking ahead to at least 3 to 6 months, to keep on top of the changing landscape.
If you are looking for support on cash flow management, please get in touch. We can help you organise your business numbers efficiently so you understand both your profit and cash flow position in real time and cash flow forecasting.
