Time to pay: What are my options?

If you are facing financial pressure, and cash is tight, Time to Pay may not be the only option.

In our experience the majority of Time to Pay requests are made when businesses are facing critical financial pressures, and making a request is another burden on management time and resource. Our team of recovery, operations and tax dispute specialists can immediately assess options and rapidly implement solutions to help ease financial pressure, and free up valuable management time to focus on running the business.

 
Liquidity is squeezed and we are not certain there is enough cash to pay our tax bill
Key questions:

  • What timely financial information, including accurate short-term cash flow forecasts do you have readily available?
  • What is your short-term cash flow situation?
  • How much do you have invested in working capital? and how liquid is this?
  • What other sources of funding, e.g. Banks, have you already approached?
  • Have you breached (or are about to breach) banking covenants?

How can we help
 

We work quickly to define and assess your options to understand if an approach to HMRC is your best option, and what alternatives there might be. For instance, there maybe improvements in your working capital which could be made that would release cash into the business. We can help you generate cash from working capital to respond to short-term liquidity issues, whilst balancing any potential knock-on impact that might have with HMRC and other financial stakeholders.

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Our payment to HMRC is overdue
Key questions:

  • What dialogue have you had to date with HMRC and have you asked for Time to Pay? What was the outcome of that?
  • Does the overdue amount breach the £1m threshold?

How can we help
 

No one likes surprises, and that applies to HMRC too. We always advocate early, open dialogue with stakeholders that encourages trust. Being hesitant about delivering 'bad news' is natural, and we can facilitate dialogue with HMRC, as well as other key stakeholders, and help you to prepare, draft and present robust information to them to address their concerns.

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A tax deferral request is our last resort - we have little or no headroom in our covenants and our lender has refused to support us further
Key questions:

  • Has your lender asked for an IBR? What further action are they taking?
  • Have you discussed with your lender plans to ask for Time to Pay?
  • What support can your shareholders and other stakeholders provide?

How can we help
 

PwC has a strong track record in managing stakeholder relationships and significant expertise in crisis situations where there are financial, resource and time constraints. We can help you respond to any planned IBR requested by your lenders.

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We have asked HMRC for Time to Pay but been refused
Key questions:

  • How much was the request for?
  • What reasons did HMRC give for the refusal?

How can we help
 

We have succeeded in achieving tax deferral requests for clients, even where previous requests and Time to Pay arrangements have failed.

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A number of companies in our group will need Time to Pay, we are unsure how to approach HMRC
Key questions:

  • How many entities have already approached HMRC for Time to Pay?
  • What access to timely management information do you have, to assess and forecast cash requirements?

How can we help
 

The introduction and assessment of IBRs by HMRC will mean separate requests by companies with a single parent may be grouped together and treated as one. In addition, it's possible that large sixfigure deferral requests for more than one year, or businesses with complex structures, might also require an IBR.

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We have submitted a request for Time to Pay to HMRC and been told we need to have an IBR
Key questions:

  • How much is the Time to Pay request for?
  • If it is under £1m, how long have you asked to defer for?
  • Does the request cover a number of different entities in the corporate structure? If so, how many?
  • What other sources of funding, e.g. Banks, have you already approached?

How can we help
 

HMRC will request an IBR to help them determine:

  • Is the underlying business viable?
  • How much cash support does the business require?
  • Is the proposed repayment period reasonable and affordable?

Our experience dealing with Time to Pay requests has shown that how you present to, and engage with, HMRC makes a huge difference to the outcome. We can facilitate dialogue with HMRC/stakeholders, and assess your options to either prepare the IBR and/or resolve your cash concerns in the short and long-term.

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