Company overview
This office renovation company was established almost ten years ago and made its name by installing office furniture to businesses across the UK. They employ a 20-strong workforce, and turn over around £1m in sales.
The problem
The business faced a significant blow when operational changes cost them a considerable sum. These changes, along with a management restructure too, contributed to the company operating at a loss for a spell.
Unfortunately, these developments meant that it wasn’t long before the company’s cash flow became a worry. Once this happened, it was only a matter of time before the situation escalated to the point where the business was at real risk of folding.
A debt of over £200k had been accrued with HMRC, with the government body putting substantial pressure on the director to pay up. Understandably though, the business had no means to pool together such an amount and started to look like yet another insolvency statistic in the making.
The challenge
It was clear that we had to look at how to make such a large debt more manageable.
The company’s director had the right idea when he contacted HMRC to discuss a possible payment plan. As we often see, however, such requests often fall on deaf ears, with HMRC flatly refusing to provide any scope for payment in instalments.
This left the owner with very few possible avenues to take. Keen to recover the company and reverse its fortunes though, the director quickly got in touch with us to see what we could do.
How we helped
We’ve seen multiple cases of businesses struggling with HMRC debts. Because of this, we’ve built up a strong working relationship with HMRC over the years. We know exactly what they’re looking for when considering a company’s ability to pay them back and can negotiate a plan that works for everyone.
Our specialist Time to Pay negotiation team were able to arrange a Time to Pay arrangement with HMRC that would see the company pay off their debt over a much longer period than HMRC usually offer.
As the expert negotiator assigned to the case, Nicholas Troth commented that “HMRC can be quite reticent in their ability to spread out any debt instalments. From their point of view, if a company is already struggling, then they’re only likely to increase that debt the longer that they carry on trading. For this reason, they’re not keen on offering any Time to Pay arrangements, let alone any that would cross into other tax years. After all, payments spanning over 12 months have the potential to impact a company’s ability to pay their taxes for the next year.
“Given the amount owed in this instance, however, a 12-month arrangement would have been far too unwieldy for our client to keep to. Happily though, we were able to secure a 36-month agreement that will see the company pay a far more manageable £5,500 per month. At this amount, the debt could be absorbed into other outgoings without impacting upon their ability to pay for other commitments”.
The result
The Time to Pay arrangement we managed to negotiate allowed our client to carry on trading without fear of a winding-up order being made by HMRC. This means that up to 20 jobs have been saved, and the company can look forward to a much more stable future.
Having trouble with HMRC debt?
We’ve helped countless businesses to arrange payment plans with HMRC that they otherwise may not have received.
Our advisers know exactly what HMRC looks for when calculating their risks and are able to negotiate affordable payment plans that keep businesses alive.
Speak to a specialist adviser now on 0800 975 0380, or email [email protected] for a free consultation with no obligation.
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