HRMC Tax Debt Management

When should a business register for VAT

In addition to the various coronavirus business loan schemes, the government has allowed businesses to build up tax debt.

Payment of the VAT due in the period March 20 to June 30 could be postponed until 31 March 2021. Unincorporated businesses and individuals could delay paying their self-assessment tax due on 31 July until 31 January 2021. Recently the Chancellor announced that taxpayers who deferred self-assessment tax or VAT will be able to apply to spread the amounts due over a further year, via monthly instalments.

All the VAT due from 1 July 2020 onwards is payable on the normal due dates. Did you remember to set-up your direct debit again to pay the VAT due in July, August or September? One late payment of VAT won’t land you with a penalty, but two or more late payments may well do, especially if you have been late paying VAT in the previous 12 months.

HMRC will contact you as soon as it is aware that a tax debt is outstanding; this can include by text message. If you receive such a contact from HMRC, or you think you will have difficulty in paying any tax due, the best thing to do is contact HMRC’s Payment Support Service on: 0300 200 3835.

We can help you negotiate a payment plan for tax debts with HMRC, but the tax officer will expect you to have thought of how you will raise the necessary funds and what the prospects are for your business.