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Specialist Insolvency Practitioners

I can’t pay the VAT – what are my options?

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When it comes to paying VAT, it can be a challenge for individuals and businesses. Reasons vary, from financial woes to cash flow issues. Thankfully, there are ways to manage VAT payments and avoid penalties.

Communication is key – reach out to HMRC asap. They can help with payment plans and extensions. Alternatively, consider borrowing from a lender or getting a loan.

Another option: get advice from an accountant or tax advisor. They can help identify potential savings.

A story of caution: Dan ran a successful art business, but his cash flow was slow. He missed a deadline for VAT by one day, resulting in hefty fines that put his business in serious jeopardy. Seeking advice and setting up a payment plan beforehand could have helped him avoid the financial distress.

Bottom line: there are options for dealing with VAT, but communication and support should be top priority. With the right guidance, tackling VAT payments does not have to be overwhelming.

Immediate Steps That You Can Take

To quickly address the immediate problem of unpaid VAT, read on for practical solutions in the section “Immediate Steps That You Can Take” with sub-sections such as calculating your exact VAT amount, getting in touch with HM Revenue and Customs (HMRC), requesting a Time to Pay Agreement, applying for a VAT deferment scheme, and considering setting up a payment plan with HMRC.

Calculate your exact VAT amount

Wondering how much VAT you need to pay? Don’t worry! Computing VAT is easy. Use the table below to calculate it. Just enter the net value of goods or services and the rate of VAT applicable, and you’re good to go!

Here’s a table with examples:

Net Value Rate VAT Payable
10 5% 0.5
20 12% 2.4
50 20% 10

Remember, businesses with taxable turnover exceeding £85,000 must register for VAT. Not doing so can lead to big penalties.

In short, computing VAT is simple and yields many rewards. Knowing the exact amount payable on each transaction helps companies manage their finances better. And staying compliant with authorities is a must.

Don’t let this opportunity pass you by! Register for VAT today and start cashing in on the advantages. Give HMRC a call – it may not be fun, but it’s certainly worthwhile.

Get in touch with HM Revenue and Customs (HMRC)

HM Revenue and Customs (HMRC) can help with tax issues. Get in touch through phone or online services. Have your taxpayer reference ready. Collect needed documents before calling.

Reach out to HMRC ASAP. Avoid penalties and fines. They can explain the situation and help create a payment plan. Late payments will add interest and fees. Don’t wait, take action now!

If you have any questions, don’t hesitate. Be informed and proactive. Protect yourself by contacting HMRC today. Request a time to pay agreement if you can’t afford bills. This is like asking for a financial time-out – no juice boxes, just relief.

Request a Time to Pay Agreement

Having trouble paying the bills? Request a time to pay agreement! This lets you pay in installments over a certain period, rather than all at once.

Contact your creditor and explain your situation. They will check if you qualify for the agreement. Read through and make sure you understand all terms before agreeing. Keep track of payment deadlines.

If you can’t afford the agreed payments, try negotiating new terms or look into debt relief programs. These can reduce your overall debt and make payments more manageable.

Take action with creditors and relieve financial stress. Request a time to pay agreement or find alternative options for some relief during these tough times. Put a pause on your payments and start living your best deferred life!

Apply for a VAT deferment scheme

Considering a VAT deferment scheme? This could help with your short-term cash flow issues. Pay your VAT as usual and indicate your intentions via the HMRC website. You’ll then get invoiced for the deferred amount, in smaller payments at a later date. Keep in mind, this is only temporary and does not erase your total amount owed.

This scheme has been around before, but due to COVID-19, it has been extended. Other countries might also have their own tax deferment schemes in place. For example, Canada exempts small businesses from taxes until September 2020.

Businesses can take steps towards easing financial pressures caused by COVID-19. Utilize schemes like VAT deferment or explore other options offered by governments worldwide.

Consider setting up a payment plan with HMRC

For those struggling to pay their taxes in one lump sum, setting up a payment plan with HMRC can be a relief. Here are 6 steps to consider:

  1. Calculate how much you owe & how much you can pay monthly.
  2. Ensure all outstanding returns have been filed.
  3. Contact HMRC to propose the payment plan & negotiate terms.
  4. Set up a Direct Debit or recurring card payments for the agreed amount.
  5. Follow the plan & check your account balance regularly.
  6. If you can’t keep up with payments, contact HMRC to renegotiate the agreement.

Ignoring overdue taxes can lead to legal action & extra fees. Setting up a payment plan helps to take control of finances without compromising other expenses.

When dealing with finances, accuracy is key. Contacting HMRC directly guarantees information is correct & properly documented.

Pro Tip: Taxpayers should manage their accounts by tracking deadlines, reviewing statements & communicating with HMRC. Out of options? Don’t worry, there’s always the option of running away to join the circus (or starting your own!) #darkhumor #immediatesteps.

Other Options

To explore other options when you’re unable to pay VAT, we present some potential solutions – Look into VAT bad debt relief, consider making a formal insolvency arrangement, refinance your business, and seek professional advice. These sub-sections will detail various alternative routes you can take to relieve your VAT troubles.

Look into VAT bad debt relief

When it comes to VAT payments, bad debts can be a real pain. But, don’t worry! There are options available to help. Look into VAT bad debt relief and see how it could help your business.

For unpaid and part-paid debts, you may be eligible for relief. You can claim back the VAT paid on the original invoice. It’s also important to note time limits for claiming relief. For unpaid and part-paid debts, you must make a claim within four years and six months from the later of either the due date or the date of partial payment. For written-off debts, claims must be made within four years of the date on which tax became chargeable.

Remember to keep thorough records for each type of debt. You’ll need all necessary invoices and paperwork. Also review your credit control policies. Have clear terms and conditions with clients and customers about payment deadlines and penalties for late payments. Keep in touch with those who owe money to stay updated.

By exploring bad debt relief options and keeping close watch on credit control, you can better manage any VAT losses caused by bad debts. Don’t ignore financial problems – consider making a formal insolvency arrangement before it’s too late.

Consider making a formal insolvency arrangement

Struggling with debts? You could try a formal insolvency arrangement. Work with a licensed pro to devise a plan to pay your creditors. It could reduce the debt or extend the repayment period.

Benefits include regaining control of your finances and becoming debt-free. But, if you don’t make payments, legal action may follow.

Don’t be scared. Understand all the details and consequences before acting. The sooner you take steps to fix your finances, the quicker you’ll be back on track.

Refinance your business

Refinancing is a great way to get your business back on track. It’s the process of replacing existing debt with new debt that offers better terms. You could save money on interest and reduce your monthly payments.

The Small Business Administration’s 504 program is one option for refinancing. It gives businesses access to long-term financing with competitive rates.

One business owner found success with refinancing. They were able to lower their monthly payments by over half and reinvest the savings in their business. This helped them to grow and expand.

In short, refinancing could be the answer to improving your business’s financial health. Get better interest rates and improved payment terms – it could be what you need for long-term success!

Seek professional advice

When faced with difficulties, seeking professional advice can be really useful. Consulting an expert in their field can give you a new outlook and provide knowledge you may not have thought about before.

It is vital to remember there are lots of professionals you can ask for advice. This includes psychologists, financial advisors, attorneys, coaches, or mentors. Each expert has their own skills and know-how that they can offer.

For example, if you’re having problems managing money, speaking to a financial advisor could help you plan a budget and set financial objectives. And if you’re experiencing troubles with job decisions or personal matters, a mentor or coach’s direction could be great.

In addition to getting advice from experts, don’t forget the value of talking to friends or family who have gone through similar issues. Talking to people who care about us can give us emotional help and a different viewpoint we wouldn’t get from anywhere else.

Lasty, everyone’s situation is different – what is good for one person might not work for another. It is important to take a moment and decide which route is best for your situation. By getting professional advice or talking to loved ones for guidance, you will be ready to make wise decisions later on.

Before you go with the usual option, remember: the less travelled path is less travelled for a reason.


Having trouble with VAT payments? Depends on the situation. Partnering with HMRC for a payment plan could be an option. Negotiate for extra time or pay in instalments. Get professional advice to pick the best course of action for you. And, don’t forget to avoid similar situations in future and have good VAT management practices.

Some cases of unpaid VAT can lead to legal action. Business owners keep trading even if their accounts are in arrears. E.g. Tom runs a small cosmetics shop. He fell behind his VAT payments and kept trading without paying for months. Finally, HMRC took him to court, leading to hefty fines and bankruptcy.

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