HMRC Agree to a Payment Plan to Repay VAT Arrears
Testimonial from a Company we Helped Avoid a Winding up Order from HMRC
Owing money to HMRC is a serious matter. Whether it is VAT Arrears, PAYE or Corporation Tax, for example, Crown Debt (as it is also known) can lead to a winding up order and liquidation. Sometimes the arrears are fraudulent and this can lead to director disqualification. Sometimes they happen despite the directors’ best endeavours. In this instance it happened to a successful, viable business, who called us in to help them out.
How this Company Owed HMRC a Significant Sum in VAT Arrears
This Midlands based company provide specialist services to blue chip clients. Their problem began when a major contractor withheld payment on a substantial contract. As a result, this quickly led to cash flow problems that were picked up by HMRC, who were owed a large amount of money. This was a situation which the company had been working steadily and successfully to resolve. The cash flow problems curtailed this on-going work to reduce the arrears to HMRC, who promptly issued a winding up petition.
We Were Called in to Advise and Take Action
We were called in by the company’s accountant. The initial view was that the likely outcome would be insolvency. The situation was serious, but it soon became clear that the fundamentals of the business were sound. Our aim is always to avoid insolvency. This is the action we took:
- We know how HMRC work and what they are looking for. We opened a dialogue with them immediately and they agreed to withhold publishing the winding up order for 48 hours.
- In the meantime, we prepared a report which demonstrated the viability of the business. This was used as a negotiating tool with HMRC. It resulted in them dropping the winding up petition and agreeing to a sensible repayment plan. The company was given a year to repay the VAT arrears.
The Company’s Accountant Had This to Say About Our Work
“We involved Poppleton and Appleby with a view to going down the insolvency route. However, they turned the situation around so that we were able to resolve the matter on our terms. The time and effort that they put in was really refreshing and the practical, sensible way they dealt with HMRC was invaluable. Now the company is continuing to trade successfully – and in the process of generating on-going tax revenue (as well as paying off its arrears) that would have been lost had the winding up order gone ahead.”
Contact us if you are facing a Winding Up Order from HMRC
Our view is that insolvency as a result of VAT arrears to HMRC is not inevitable until the full facts are known and every effort has been made to turn a difficult situation around. As this case demonstrates, speed is often necessary, so the sooner we are involved the better. Contact us or call us on 0121 200 2962 for a FREE initial chat.
