Can You Negotiate With HMRC?


Why negotiating with HMRC is importantNegotiating with HMRC can be a daunting task, especially if you’re not familiar with the process.

It’s important to remember that HMRC is a business like any other, and they are open to negotiation. The first step is to contact them and explain your situation. Be honest about your financial situation and explain why you are unable to make the payments.

Once you have done this, you can begin to negotiate a payment plan. It’s important to remember that HMRC is not required to accept your offer, so be prepared to compromise.

If you are able to reach an agreement, make sure that you get everything in writing before making any payments. By following these steps, you can successfully negotiate with HMRC and get your business back on track

Why negotiating with HMRC is important

Negotiating with HMRC is important for any business owner. While it is the responsibility of the business owner to keep HMRC abreast of their dealings and ensure that all taxes are paid on time, there may be instances where you can Negotiate with HMRC to reach a resolution. Negotiating with HMRC can help to avoid strict penalties, such as small fines that can escalate to larger fines, or even the liquidation of your business.

When you’ve worked hard to build a business, you don’t want to lose everything you’ve worked for because of a few missteps. Negotiating with HMRC can help you to keep your business afloat and avoid some of the harsh penalties that can be levied against you.

How can HMRC help me? 

HMRC can help you with negotiations towards any types of tex debts if you are having difficulty paying your taxes. However, it is important to remember that HMRC is not a charity and they will only help you if they feel that you deserve it. This means that you must be able to demonstrate that you have made a genuine effort to pay your taxes on time and that you are facing financial hardship as a result of your tax debt.

If you can do this, then HMRC may be willing to help you by deferring your taxes or providing other assistance. However, it is important to remember that HMRC will not simply write off your tax debt and they will expect you to make a plan to pay back what you owe over time.

Will HMRC negotiate with a Time to Pay Arrangement

If you’re facing financial difficulties and HMRC are investigating you for tax irregularities, you may be eligible for a Time to Pay arrangement. This is an arrangement between you and HMRC that allows you to spread the cost of your tax bill over a period of time. HMRC will only consider a TTP arrangement if they believe that you are a fiscally responsible owner who cares about your business and its employees.

They will also take into account whether you have responded appropriately and efficiently to all investigations and outreach. If HMRC believes that you meet these criteria, they may offer you a TTP arrangement. This can provide valuable breathing space if you’re struggling to pay your tax bill, and can help you avoid more serious financial difficulties down the road.

Time to Pay is an agreement between a business and HMRC. It allows the business additional time, usually 12 months, in order to repay debts owed

However, not all Time to Pay agreements are the same. Details of the agreement, such as the amount paid monthly, and the duration are worked out on a case by case basis This spreading out of the debt across an additional period of time allows businesses more flexibility to work and come up with the funds without risking the future of the business. 

Can everybody negotiate with HMRC?

When it comes to tax debts, the option to negotiate with HMRC is not available to everybody. The taxman will only consider you a viable candidate for their Time to Pay arrangement if they are confident in your capability to make the required repayments over the agreed period of time.

This means that if you have a history of late or missed payments, you are unlikely to be successful in arranging a payment plan. However, if you have recently fallen behind on your tax payments and can demonstrate an ability to repay your debt within a reasonable timeframe, HMRC may be willing to work with you. If you find yourself in this situation, it is important to act quickly and contact HMRC to discuss your options.

You will not be considered viable if you have any of the following: 

  • Previous history of late or overdue tax returns
  • Failing to cooperate with past agreed repayment schemes
  • Poor financial information supplied to HMRC in the process

How to negotiate with HMRC

Negotiating with HMRC is all about communicating your perspective punctually, effectively, and efficiently – just like any other form of negotiation. However, something a lot of people don’t understand is that negotiations with HMRC don’t really start when you might think they do.

For HMRC, the negotiations start years before you ever need to speak to them about anything. If you spent years being avoidant, ignoring calls, letters, and emails from HMRC, you have already shown your hand, and it becomes highly unlikely that the taxman will accept you as a legitimate case for help.

Therefore, it’s important to be proactive in your communication with HMRC from the very beginning. By keeping them up-to-date on your situation and promptly responding to their requests for information, you will stand a much better chance of negotiating a favourable outcome – should the need ever arise.

As a business owner, it is important to remain active and engaged in all your dealings with HMRC. If you show that you are on the ball and are actively involved in running your business, HMRC will be much more likely to negotiate and support you as a responsible business owner.

However, if you are inactive and disengaged, HMRC will be less likely to offer any assistance or support. Therefore, it is essential that you remain active and engaged in all dealings with HMRC in order to maximise your chances of receiving support from them.

Can Assist With HMRC negotiations?

We understand that dealing with tax can be stressful and confusing. We also know that sometimes people can fall behind on their tax payments, or make mistakes that result in fines from HMRC. If you find yourself in this situation, we can help. Our team of tax experts can negotiate with HMRC on your behalf, and help to resolve any outstanding issues.

We can also provide guidance on how to stay compliant in the future, and help you to avoid any further penalties. If you’re struggling to deal with HMRC, don’t hesitate to give us a call or simply complete the online enquiry form. We’ll be happy to help you get back on track.

Steve Jones Profile
Insolvency & Restructuring Expert at Business Insolvency Helpline

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.