HMRC is a creditor which all business owners have in common.
Unexpected or badly planned for corporation tax, VAT or PAYE bills account for many insolvent limited companies, and HMRC is by far and away the most regular petitioner to wind up limited companies through the court.
McAlister & Co discusses payments with HMRC on a daily basis, we know what works and what solutions will be available to you. If you need help regarding HMRC and outstanding VAT or Tax that you or your business cannot pay, contact us.
Is it true that I can’t negotiate or write-off any debts I owe HMRC?
This used to be the case, but HMRC is no longer a preferential creditor, meaning that they share the same status as your other creditors and debt owed to them can be included in a an insolvency procedure, such as a CVA, or even written off in liquidated companies.
What can McAlister & Co do to help if I can’t afford to pay HMRC or VAT bills?
Negotiating with the HMRC can be daunting, but you don’t have to do it yourself. We are able to liaise with HMRC on your behalf, as we would with any other creditor, to come to an agreement about your situation. In addition, as a trusted and expert third-party intermediary, we are likely to have more success at negotiating the best outcome.
As licensed Insolvency Practitioners, we can oversee CVAs and CVLS and act as official Administrators for companies opting for the Administration route. Other than striking off your own dormant company at Companies House, all company liquidation and dissolution procedures will require the services of a licensed Insolvency Practitioner, such as McAlister & Co.
Will I have to wind up my limited company if I owe tax or VAT?
Many companies trade through temporary insolvency companies be facing the problem head on, entering into an insolvency plan and communicating with creditors. Being in arrears with HMRC doesn’t have to spell the end of the road for your limited company. There are plans available, such as Administration and a Creditors Voluntary Arrangement (CVA), with which the HMRC will agree to be paid out of future profits.
How can a CVA help if I my limited company can’t pay the HMRC?
A Creditors Voluntary Arrangement (CVA) allows the company to enter into a formal arrangement with its creditors, whereby they acknowledge that your business can still make future profits, and they agree to a reduced repayment of their debt over a set period to allow the company to continue. In this way, they are able to recoup more of their debt than if the business had been liquidated.
How can a CVL help if I my limited company can’t pay the corporation tax, PAYE or VAT arrears?
A Creditors Voluntary Liquidation (CVL) is a straight forward process whereby the assets of an insolvent company are dissolved and distributed to its creditors. The liquidation arrangement shares the money realised from the assets among the creditors, based on the proportion each creditor is owed and HMRC can be included in the same way as any other creditor.
Once all of the assets have been distributed, all remaining debt is written off.
How can an Administration help if I my limited company can’t afford to pay HMRC the corporation tax, PAYE or VAT arrears?
While a company is in Administration, a moratorium is in place, meaning that the limited company is legally protected from action by creditors and this includes protection from a winding-up petition from the court on behalf of HMRC.
As well as legal protection, an Administration puts the company in the hands of an administrator; a role usually carried out by an Insolvency Practitioner. The Administrator will take care of the financial running of the company to try and increase its profitability and get it ready to sell on, or hand back to the Directors once turned around.