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COVID-19 Advice for business - Time to Pay (TTP) arrangements - news article image

COVID-19 Advice for business - Time to Pay (TTP) arrangements

20 Mar 2020

2 minute read

Updated on the 24th March 2020

A TTP is an arrangement to allow a business suffering temporary financial difficulties to pay its tax liabilities over an extended period of time rather than on the day they fall due. VAT, PAYE and Corporation Tax can all be subject to TTP arrangements.

Following announcements on the 20 March 2020 TTP arrangements will only be needed for PAYE and Corporation Tax deferral whilst the VAT and Income Tax deferral schemes are in place. Once those schemes come to an end, TTP options will be open again. This will remove some of the strain on HMRC contact centres in the short-term.

TTP is appropriate where the business is suffering temporary financial difficulties rather than fundamental ongoing financial difficulties. In this regard, the government has already recognised that TTP is a valid route for businesses suffering as a result of the current ongoing COVID-19 pandemic.

The government has set up a dedicated HMRC Coronavirus Helpline - 0800 015 9559. This helpline is currently open Monday to Friday 8am to 8pm and Saturday between 8am and 4pm.

HMRC has stated that this helpline can be used to:

  • Agree instalment arrangements
  • Suspend debt collection proceedings
  • Cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

HMRC prefer that they are approached by the Director of the company before the liability falls due. Historically, they have still considered matters if they were contacted after the due date.

In normal circumstances during the call you would need to explain what has caused the problems and have a clear idea of how much you could afford to pay (ideally supported by cashflow projections). Typically, HMRC have tried to keep the length of TTP arrangements to six months or less though longer arrangements have been achieved in the past. Things might be slightly different in the current climate; we have seen instances of HMRC simply ‘parking’ payments for two months to allow some time for conditions to improve. It seems that HMRC are being helpful, but we anticipate that they will be receiving a very large number of calls.

If you are unable to speak to HMRC in the days approaching your due date for payment, as an additional option, you may wish to write to HMRC (assuming the postal service holds up), setting out the reasons for your late payment and that you would wish to agree a TTP arrangement, but haven’t been able to make contact with HMRC. We expect that this would avoid any eventual penalties when HMRC are able to revert to a normal level of activity.

COVID-19 Advice for business - Time to Pay (TTP) arrangements - news article image

Author:

Emily Hillier

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