What to Do If You Can’t Pay HMRC: Expert Advice for UK Taxpayers

It’s normal for everyone to experience uncertainty surrounding their finances from time-to-time, and that in particular this time of year with the festive period and tax return season right around the corner, can make those worries seem even greater. 

If managing your business finances feels overwhelming and you’re unsure where to turn for guidance, Aardvark Accounting is here to help. 

In this blog, we provide clear direction to help you navigate these challenges. Please know that you’re not alone, and our team is ready to help you access the support you need. 

Your Client Director is here to help and support you. They speak to hundreds of clients on a weekly basis, many of whom have also experienced issues with their financial situation and have been able to offer the correct advice and support on where you need to go next. 

Whilst financial issues can be considered a taboo subject by some, here at Aardvark we know how tough it can be to get out in the open and ask for help, and so we urge you to get in touch. Your Client Director can help put together a plan of action for you and show you what you need to do. Please know that this is done without judgement, and it’s our job to ensure you’re on the right path. 

There are many misconceptions regarding HMRC, one of which is that they are harsh enforcers who will demand full and immediate payment for outstanding tax, regardless of your circumstances. This simply isn’t the case. 

With the correct visibility and communication on what’s happening with your personal circumstances, HMRC can potentially offer you a payment plan that suits both you and them.  

Whilst your Client Director can offer their support through this process, they are unable to speak to HMRC directly on your behalf, as they will not have the authorisation to do so. 

If you feel that after speaking with HMRC the options they’ve set out for you are still unachievable, you do have the option to liquidate your company through Creditor’s Voluntary Liquidation (CVL). To do this you’d need to appoint an insolvency practitioner, who effectively becomes the middleman between your company and HMRC, and they work by assisting in managing you debt. The ultimate end goal is the dissolving of your company, and your Client Director can put you in touch with a trusted partner to start this process.  

Please note that company liquidation is final and is a process that should only be considered as a last resort, as it may have an impact on your future eligibility for directorships. You may also have other options based on your personal circumstances, so we’d advise speaking to your Client Director as a first port of call.  

1. Get in touch with your Client Director. They’ll be able to help put together a clear picture of your circumstances, what needs to be done and the steps you’ll need to take. 
2. Speak to HMRC directly, and you can find the correct department’s contact details here. The more information you’re able to provide them with, the more help they’ll be able to offer you (such as their payment plan called Time to Pay Plan). Their opening hours are Monday to Friday 8am – 6pm, and they’re closed weekends and bank holidays.
   When you call them, ensure you have the following information ready that you prepared with help from your Client Director: 
   • Your unique Taxpayer Reference (UTR) or tax reference number. 
   • Details regarding how much you owe and reasons why you’re not able to pay. 
   • How much you’re able to pay right now and how long you think you’ll need to be able to pay the rest. 
   • Your income and expenditure details (for individuals / self-employed).
3. If you think that HMRC’s options are still unachievable, consider company liquidation. Speak to your Client Director for more information.
4. Make sure to take some time to look after yourself during this period. Financial worries can take a huge toll on your mental and physical health, so it’s important to remember your self-care in these moments. Your Client Director is always here to offer their support and guidance, but if you feel that you’re struggling with your mental health and need further advice, Samaritans are always there to listen. You’re able to call them directly on 116123, email them at jo@samaritans.org, write a letter, or speak to a Samaritan face-to-face.    

Remember that you’re not alone in circumstances such as this or feel as though these types of issues will resolve themselves. We’ve had many clients in the past who have experiences similar issues, and with their Client Director’s help have been able to find a path forward. 

We’re always here to help, please reach out and let us help you take the next steps.