HMRC tightens Time to Pay arrangements

HMRC’s position on Time to Pay (TTP) arrangements has tightened in recent months.

During the peak of the Covid-19 pandemic, HMRC rightly adopted a supportive strategy with respect to outstanding liabilities, opting to support longer term arrangements and halting the majority of enforcement actions.

As we move on from the pandemic years, we are now seeing HMRC beginning to return to a more normalised position in terms of collecting tax revenues. This is clearly illustrated in the number of advertised winding-up petitions.

In the entirety of 2021 only eight filed petitions were advertised. In 2022, there were 693, with 70 per cent falling in the last four months of the year.

Within the funding pillar of Leonard Curtis sits an expert team specialising in TTP arrangements and informal negotiations.

Since forming the team in 2001, we have successfully negotiated well over a thousand TTPs, rescheduling almost £200m of liabilities and helping to secure more than 45,000 jobs.

In that time, we’ve witnessed many changes in HMRC’s attitude to arrangements, whether due to external factors, such as the banking crisis and Covid or due to internal policy changes.

Our own recent experience with HMRC has seen a tightening down on the duration of TTP agreements. In 2021, the average TTP we agreed was for 34 months, with the longest being over 11 years. In 2022, that average had reduced to 29 months, and, for the year to date, we are averaging 25 months. HMRC are becoming less lenient and Time To Pay arrangement conditions are returning to pre-pandemic levels.

As always, it is key when dealing with HMRC that business owners enter dialogue early, to ensure the best chance of agreeing an arrangement with an affordable level of repayments without putting the business under any undue pressure.