1. Agree a payment plan to repay it
This is something that you can do, but if you want our help to use our contacts at HMRC, then we are happy to offer you that assistance. We can also offer help with other creditors, if you would like us to.
2. Raise finance to pay it off
This is not always easy, and we think you have probably made your own attempts, but who would want to lend a business some money just to give it away against a tax debt and then have nothing to show for it. If you find a willing bank, then please let us know. We are also aware that when anyone linked to your finances, particularly your bank becomes aware that you are having difficulty paying your VAT, PAYE or Corporation Tax it will put your relationship in jeopardy and will almost certainly remove any chance of getting further finance to help you out of those difficulties.
We work with a variety of specialist lenders, from those who do not look at loans below £25m, to the short-term ones, who will fund simply this month’s payroll.
Many are happy to arrange a finance facility in the full knowledge that it is to repay HMRC arrears, provided they get guarantees or other securities. Thus, we may enable you to get additional funds to help with your cash flow.
3. Attract some Investment
Given our involvement in the insolvency world, we are aware of many routes to this, from wealthy individuals, to crowd funders. So, if you choose this route, we can still help.
4. Do nothing
HMRC (and most other creditors) will issue winding up proceedings against the company if you do not let them know what is happening and how (and when) you will pay them. For HMRC, the case will move from a local officer who you might have been able to reason with, to a centralised debt management team in Worthing (Closing shortly), Newcastle, Cardiff or Edinburgh, who will simply follow a process before referring the matter to the HMRC solicitor’s office to wind up the business and get whatever payment they can.
A court date will be set and on that date the company will be put into liquidation (or an individual into bankruptcy) and the Official Receiver will be appointed as liquidator (or Trustee of the bankrupt). In Scotland, a similar scheme happens although they do not have an official receiver, always using a private insolvency firm from a rota instead. Following this there will be a lengthy investigation into why the business failed. That will include looking at you and the decisions you made. HMRC may also bring into action their alternative rights to the money (meaning you will be the target) and these can get quite complicated. An example would be for a business, transferring the PAYE debts on director’s liabilities to those individual directors or issuing a personal liability notice to those same directors for all the outstanding National Insurance debt of the business. Both can be scary, but having worked in both teams for HMRC, we can help and have the individuals who previously signed off on the case selection and the court proceedings following such actions, working for us.
We have also personally carried out this work in the private sector and can advise that even events where the decision seems to have been perfectly reasonable at the time, with hindsight, can be very costly to those who took them.
As stated before, we are experts in this area and are happy to help.
5. Sell the business
We can help you do this, even with HMRC and other debts, but you will need to keep the creditors informed and come to an agreement to ensure they do not take any enforcement action. We can assist you with this.
6. Put the company into administration or liquidation
We have done this for many years and are aware of what to do and when to do it. We can help select a Liquidator, Administrator, Trustee etc to handle the style of insolvency that results. We can also advise you prior to this, which way would be more beneficial and why, work with you, whilst the insolvency concludes and hopefully help you to get back to running a successful business. We can even do this if you are pushed through one of these events by your creditors before you act yourself, by helping negotiate settlements etc.