ADVICE
Time to Pay Arrangements
Time to pay arrangements
You can use a Time To Pay arrangement where you are trying to keep your business going and avoid all the consequences of a formal insolvency like liquidation or bankruptcy.
The usual first creditor to ask for time to pay is HM Revenue and Customs for VAT, PAYE, Income Tax and Corporation Tax arrears. They will consider letting you spread built up arrears over many months. Usually this is up to maximum of 12 months but since Covid this may be for a longer period than that in exceptional circumstances. HM Revenue and Customs may ask you to do a cash flow forecast to prove you can afford to make the payments and that you can maintain new payments as they fall due.
You can then ask other creditors for help with time to pay including bank loans, business rates and utilities and suppliers.
This financial breathing space can help you to sell spare assets (or refinance them) and collect in debtors to improve your business finances.
If you need help with a Time To Pay we can deal with your creditors for you and help you with your cash flow forecasts.
Advantages & Disadvantages
Advantages to Time To Pay
- There is no formal insolvency, so it is confidential between you and your creditors.
- You can keep the business going and customers do not know nor do employees.
- It means transaction such as preferences or overdrawn loans accounts do not have to be immediately repaid.
- There is no report on the director’s conduct to the Insolvency Service so no risk of a director’s ban.
Disadvantages of Time To Pay
- You may still be under a lot of pressure financially.
- If you do not keep up with the agreed payments your business may then be pushed into liquidation.
- It is not good if the financial position gets worse. There is no defence to say you did not know it was already bad because of course you had arranged a Time To Pay.
Conclusions
We meet the same problems all the time for business in trouble and you are not unique, and you are not alone. What does make a difference is recognising early on that you need help – the sooner you get help the more chance of saving your business.
david@kirks.co.uk
Phone
0808 1961496
Offices
Across the South West, London & Wales
David Kirk
Kirks Insolvency
David qualified as a Chartered Accountant in 1990 and Licensed Insolvency Practitioner in 1996. David will give you clear and plain language advice about your business’s options and make a recommendation of which route he thinks will work best for you.
★ ★ ★ ★ ★
“Very straightforward and thorough”
We appointed Kirks to manage the process of an MVL when we had ceased trading and found their service to be very straightforward and thorough. A fixed fee arrangement provided us with reassurance and David explained the process clearly to us at the outset. A very professional service all round.
David Mills
Business owner
WHy use Kirks
Testimonials
