If you have built up arrears with HMRC, it is important that you understand what your options are. We can guide you through the processes involved and help make things more manageable.

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What to Do if You Have HMRC Arrears

Should you find yourself with HMRC tax arrears, it is imperative that you act quickly. Burying your head in the sand will do nothing but allow the situation to escalate out of your control, and possibly lead to action such as a winding up petition. You may be able to avoid all of this if you contact them first.

When it comes to HMRC tax arrears, it is likely that you have outstanding obligations with one of these three liabilities.

  • Corporation Tax: This levy is paid on all taxable profits made by UK companies. When it comes to the calculations of a firm’s corporation tax, the onus is on the business to make sure all returns are accurate and filed/paid on time.
  • Value Added Tax (VAT): A tax that must be paid by all businesses whose income exceeds the £83,000 VAT threshold. It is charged on the sale of all goods and services by UK businesses at a standard rate of 20% and must be paid quarterly
  • Pay As You Earn (PAYE): The system used by HMRC to collect corporations Income Tax and National Insurance Contributions from a business’ employees. The employer must remove the required amount from workers’ wages and pay it directly to HMRC.

If you have started to build up HMRC tax arrears that you cannot afford, you should first of all ensure that you completely understand your financial situation and where the arrears stem from. Does the owed figure seem correct? Mistakes at the tax office are rare, but they do happen. If you feel that the amount owed is incorrect, it may be possible for you to dispute the debt. It is important that you take any necessary appeal action before you enter into any form of payment agreement with HMRC. The collection of the disputed debt should be postponed during the appeal process, to take the pressure off, albeit temporary.

Failure to settle HMRC tax arrears could lead to serious financial difficulties. If there is no appeal process underway, and no attempt to contact the tax office regarding the arrears to negotiate some form of payment plan, then HMRC are likely to take some form of enforcement action against you. This could be court bailiff action, or even liquidation that can result in the forced closure of your company.

Regardless of your situation, it is recommended that if you find yourself faced with HMRC tax arrears, you should contact an independent expert as soon as possible to ensure that you are protected, and make sure that you are dealing with your arrears in the best manner possible for the future of your business.

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If you are faced with HMRC tax arrears, you can rely on our specialist team to assist. Get in touch today.

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How to Pay HMRC Owed Tax

If you owe money to HMRC, it is important that you are proactive and efficient in your actions. While each business and its situation may vary, it is important that you follow several key steps of paying owed money to the tax office; from assessing the situation and seeking specialist advice, to negotiating with and paying HMRC.

How Inquesta can Help if You Owe Money to HMRC

If your business is faced with financial difficulties, no matter the severity, or their causes, it is important that you get in touch with a specialist that you can trust. Inquesta have a skilled team with all of the expertise you could need to fight your corner and help you turn your business back around.

We place the interests of our clients at the forefront of everything that we do, to ensure that their needs always come first. This is how we provide a personal service that guarantees results. We have experience guiding businesses of all shapes and sizes through repayments to the tax office, so we are perfectly assisted to support you.

You can be assured that with Inquesta’s tax debt solution service, you are working with a provider that you can trust. Contact us today.

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Our Specialist Team

Inquesta’s dedicated team has decades of experience working closely with businesses faced with HMRC arrears. We have seen everything and know exactly how stressful a situation it can be, and what you need to do.


Steven Wiseglass

Director of Insolvency

A co-founder of Inquesta, Steven is a licensed Insolvency Practitioner with over a decade of experience in the field. He is a member of the Insolvency Practitioners Association, Association of Business Recovery Professionals (R3), and his insolvency licence is issued by the Insolvency Practitioners Association. In addition, he sits on the R3 committees of the North West Regional Committee.

Steven specialises in advising directors of small to medium-sized businesses, and has a wealth of expertise in providing the most appropriate advice whatever the firm’s circumstances may be. He has also been instrumental in helping company directors save their business and rebuild them into successful enterprises.


Steven Mason

Insolvency Practitioner

A licensed Insolvency Practitioner, Steven specialises in advising directors of small and medium-sized businesses on their options when faced with financial problems. These include liquidations, administrations, and company closures.


Martin Willock

Insolvency Advisor

Martin specialises in advising directors on matters involving corporate insolvency.

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In most cases, if you owe HMRC money they will attempt to reach out and contact you to discuss your situation, to find a solution that benefits both parties. Some options HMRC may agree to are:

  • A Time to Pay payment plan
  • Overpaid taxes that would be repaid may be used to clear owed taxes
  • Tax code may be adjusted if you receive PAYE income.

It is important that you respond to any correspondence from HMRC as quickly as possible to make it clear that you are not refusing to pay what you owe.

Should you find yourself in the position of owing significant sums of money to HMRC, it is possible that you could be made bankrupt if they do not believe that you will be able to repay. In this scenario you would lose your business, your home, and any other assets necessary to repay your accrued debt.

This is why negotiating with the tax office is so important. Failing to work with them will only see your problems mount up, and could result in you having to pay court fees and HMRC costs on top of your original arrears.

It is possible for any taxpayer to access the amount they owe via HMRC’s online services. This site will provide you with a sum of the payments you are required to make in both January and July, as well as giving you access to data on all of the historical payments made on your account.

A Time to Pay agreement is a method of allowing a party to spread their repayments over 12 months. You can set up your own Time to Pay self assessment plan online, without needing to contact HMRC directly if you:

  • Owe up to £30,000
  • Have no other outstanding tax debts or returns
  • Have no other payment plans in place with HMRC
  • Set up the plan no later than 60 days after the payment deadline

How far back HMRC can claim arrears will depend on the suspected severity of your case. Typically, arrears due to simple mistakes can be investigated up to four years, cases of believed carelessness can be investigated up to six years, and investigations into suspected deliberate evasion of tax can go back up to 20 years.

You can. However, there are strict guidelines you must follow. A failure to do so can result in severe consequences. Liquidation options open to you should you find yourself drowning under severe tax debt include; Creditors Voluntary Liquidation (CVL), Compulsory Liquidation, and more. Should you wish to follow this course of action, it is highly recommended you contact a specialist.

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