Time To Pay Arrangements and Security

HMRC’s next step – Security HMRC has provided a number of services to support businesses that have been affected by the economic downturn principally through Time to Pay (TTP) arrangements. There has been a rise in the number of TTP requests being rejected by HMRC some of which are potentially good businesses but which have suffered misfortune beyond their control. TTP arrangements are becoming harder to secure and the Revenue has effectively declared war on clearly insolvent businesses seeking arrangements which continue to incur losses without any realistic prospect of recovery. The argument is if a company cannot pay its current debt, it will most certainly struggle to pay debt going forward. HMRC, which has not held preferred creditor status since the Enterprise Act 2003, could potentially take security against tax arrears just as other lenders do. Security may well have been offered to support a TTP proposal and declined by HMRC in the past, it is now reasonable to conclude that HMRC is ready to make such a move. The reason being a TTP can never guarantee the survival of a distressed business on its own, as potentially drastic changes may be required to turn such a business around, however, in the event of insolvency the prospects of a meaningful recovery to HMRC is enhanced. Courtley West Chartered Certified Accountants...

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