Set up a payment plan for your taxes with HMRC during Covid-19

Here’s what you need to know and what you need to do:

1. If you have a VAT payment due before 30th June 2020, you can defer payment of this until 5th April 2021 without contacting HMRC.
2. For all other taxes, HMRC has a dedicated phone line to agree payment plans for taxes:

• The number you need to call is 0800 015 9559
• A Director or Owner of the business has to call to discuss payment with HMRC
• This line is open from 8am to 8pm and the best times to call is first thing in the morning (before all businesses open at 9am) or after 5pm
• You will need to explain why your business has been affected by COVID-19 and therefore why you need to delay payment of your taxes, e.g cancelled contracts, travel plans or staff absences due to self-isolation
• Only call in the week before the tax payment is due
• Please make sure that all of your tax filings are up to date

The information to have handy when calling HMRC:

• Company registration number
• Company address
• Company telephone number
• Company Unique Tax Reference – if discussing Corporation Tax
• PAYE and accounts office reference numbers – if discussing PAYE
• VAT registration number and the figure from box 5 of your latest VAT return filed (it needs to be filed) – if discussing VAT

A few practical points:

• PAYE payments will initially only be delayed for a month
• If you have any indication that you won’t be able to stick to the agreed plan, please communicate with HMRC as they can renegotiate the dates and amounts
• HMRC may insist on Direct Debit collections

Virus or not, here are the usual questions HMRC like to ask and some reasons why:

• What is the cause of the cash shortage? Usual answers would be as above or delayed payments from clients or bad debts, delayed receipt of a grant, etc
• What have you done to ensure this won’t happen again (this is unlikely to be asked on the Coronavirus number) – it is worth having a cash flow forecast drafted for the next few weeks?
• Have you approached your bank or tried to obtain credit at some other places? HMRC want to make sure that they are not used as a free credit facility.
• Have the directors been taking drawings/dividends from the company? HMRC would like to ensure they are not at the end of the payees list. They accept the fact that salaries/overheads are the priority, but not after drawings/dividends
• Are you up to date with all other taxes? If not they will be looking to pass the call to debt management who can agree on a plan for the whole debt.
• What and when can you pay? Please be prepared to commit to some dates and amounts. Ideally, HMRC would like some of the debt to be paid within the deadline, as this increases their debt recovery chances and shows goodwill.

We understand that this is a stressful time for you and your business. HMRC is operating on reduced staff numbers and is working relentlessly to help as many callers as they can – usually we find, the nicer we are to them, the more willing they are to help.