Businesses that Have Indirect Tax Liabilities and Employers

If you have received a notice by HMRC that states you have tax liabilities, it is extremely important to contact HMRC or your local tax office immediately. Request them to send over any important information that you can go over to verify that there was not a mistake made. In addition, go over your own business documents and contracts to make sure a mistake was not made on your end. Many times an incorrect tax code classification can be the catalyst to the problem. By communicating with HMRC or your local tax office, you can quickly determine if a mistake has been made or if you in fact owe taxes.

If a discrepancy has been found, it is important to contact HMRC immediately and communicate the discrepancy. Some maters can be corrected fairly easily. If an issue in which a discrepancy occurs is complex, you should seriously consider hiring professional help such as an account or tax advisor to help your company correct the situation.

For the most part, businesses should have the assets available to ensure that VAT, PAYE, NIC and other liabilities are handled sufficiently. However HMRC does understand that there may be instances in which circumstances outside your business’s control make it not possible at the present time to pay off any outstanding tax liabilities.

For the most part, HMRC generally requests all outstanding tax liabilities to be paid immediately or within a 28 day period- if a business does have the money available. However for those businesses that are still viable, but at the moment unable to pay off their outstanding tax liabilities, HMRC may be able to negotiate a repayment plan.

It should be noted that in order for HMRC to negotiate with you or your company a reasonable repayment plan, your business must first send in any outstanding tax returns, as well as continue to comply with HMRC during the repayment period. This means that if you negotiate a repayment plan and then are unable to pay your current tax liabilities outside of the tax liabilities you already owe, your repayment plan may be in jeopardy.

If you have received a notice that tax liabilities are owed to HMRC, contact HMRC immediately. If your business is not able to settle any tax liabilities in full, you should be prepared to submit the following information;

* Explain to HMRC why your company is unable to pay your debt in full
* If you can, pay as much upfront as possible to avoid interest, penalties, etc
* Announce your proposals for a repayment plan
* Provide HMRC with any type of evidence or documentation that they may require including business financial circumstances and data stating whether your business is viable or not

If you are able to come to an agreement with HMRC and construct a payment plan that both parties are satisfied, request the details of the plan in writing.

For those businesses that are either not able to come to an agreement with HMRC over the payment plan, are still unable to pay off their tax liabilities or have specific disputes over the amount, etc HMRC may use enforcement methods to secure its payment. Enforcement methods used to secure payment may include the following:

* Distraint- This method involves the seizure and subsequent sale of goods by public auction.
* Bankruptcy or Insolvency- This method can mean the loss of your business and assets.
* Proceedings in the County Court- This method asks for an order of payment. If payment is not received, your goods and assets are subject to sale to raise money to pay off your debt.
* Proceedings in the Magistrates’ Court- This method involves a court order to send the baliff to take your goods and sell them at public auction. This sale is used to raise money to pay off your debt.

It should be noted that if you have any difficulties with repaying your tax liabilities there are several organizations available that may be of help, one organization is the Business Debtline. You can find more information about this topic at the following link:
http://www.hmrc.gov.uk/howtopay/prob-bus-emps.htm

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You can find more information about this topic at the following link:
http://www.hmrc.gov.uk/howtopay/prob-bus-emps.htm

Source: http://www.hmrc.gov.uk/howtopay/prob-bus-emps.htm