Can You Negotiate With HMRC?

Can you negotiate with HMRC debt owed by a limited company? Yes, you can negotiate with HRMC but it’s not the most straightforward negotiation.

What Is A Time To Pay Arrangement?

There is actually a recognised procedure known as a time to pay arrangement HMRC provide for that can be addressed in the first instance verbally. They may not agree to setting up a time to pay arrangement.

Typically, such an arrangement would last three to six months but it could go up to a year. You put the proposal to HMRC and they will consider it.

You can pick up the phone to HMRC, explain the issues, whether it’s that PAYE, VAT, or corporation tax and you can try to agree a time to pay arrangement.

Defaulting On A Time To Pay Arrangement

If you default, HMRC will want the time to pay arrangement to then be in writing and if you default on that, then it is difficult to avoid needing to pay the debt off in full quickly..

Negotiating with HMRC is not quite the same as with a trade creditor, because it is a government body and they will have certain set procedures as they try to be consistent across the board. 

The basic principle is that if you stick to the procedures, it is possible to negotiate with HMRC. However, if you default on a time to pay arrangement, then if it happens again after the written agreement is set up, HMRC will start to move matters towards their enforcement office and look to issue a winding up petition.

To set up a time to pay arrangement you can contact HMRC here.

Alternative: Payment Plan With HMRC Online

You may be able to set up a payment plan online with HMRC for the last self assessment, VAT and PAYE.

Self Assessment Payment Plan Conditions

A payment plan for a Self Assessment bill online can be done if:

• owe £30,000 or less
• no other payment plans or debts with HMRC
• tax returns are up to date
• less than 60 days after the payment deadline

PAYE Payment Plan Conditions

A payment plan for PAYE the last bill online can be done if: 

• You missed the deadline to pay an employer PAYE bill 
• owe £100,000 or less 
• plan to pay your debt off within the next 12 months 
• have debts that are 5 years old or less 
• do not have any other payment plans or debts with HMRC 
• have sent any employers’ PAYE submissions and Construction Industry Scheme (CIS) returns that are due 

VAT Payment Plan Conditions

A payment plan for your latest VAT bill can be done online if: 

• have missed the deadline to pay a VAT bill 
• owe £100,000 or less 
• plan to pay your debt off within the next 12 months 
• have a debt for an accounting period that started in 2023 or later 
• do not have any other payment plans or debts with HMRC 
• have filed all your tax returns