PAYE/NICs, corporation tax and VAT - time to pay your tax
For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:
- agreeing an instalment arrangement
- suspending debt collection proceedings
- cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately – but it is not clear whether this only covers an inability to raise funds on time to pay the tax or, if a penalty already exists, cancelling the penalty and interest already accrued. If you are in a situation where you believe a penalty or tax liability has been imposed incorrectly it is now arguably worth considering whether to make the point that paying the penalties will jeopardise the survival of the business.
It is not yet clear what is meant precisely by “due to coronovirus”. What will businesses have to show? Our experience on the Helpline however suggests a very flexible approach is being taken.
It should be said that given we have no published legislation yet, each business must check with HMRC (use the Helpline) on the following, but HMRC told us that what this all means with regards to CT, VAT, PAYE and NICs is:
- If you can pay something please do but you don’t have to for at least three months. So you can hold back if your business needs the cash;
- In relation to the PAYE costs for the following month, the business will have to ring HMRC again to update HMRC on the situation and apply for a deferral for those costs if needed. A similar approach is being taken with VAT in cases where a business defers the VAT due;
- There are no late fees or interest as result of deferring payment.
- At present the maximum extension available is 3 months but this could be extended depending on how things work out.
The HMRC helpline number - 0800 0159 559 - is in addition to other HMRC phone contact numbers. There are 2,000 experienced call handlers but the line is already so busy that they are encouraging callers with non-urgent queries to wait a few days.
When you call you will need the relevant tax numbers and references to hand (eg VAT number, corporation tax reference, PAYE reference) and information regarding the number of the last VAT return, the date of VAT first registration and your postcode. It will be impossible for agents and advisers to talk to HMRC unless they are authorised to do so.
The arrangements for deferral will be noted on HMRC’s records but all businesses should also keep their own records of such arrangements. We recommend that businesses diarise calls to HMRC to agree further extensions. If for instance VAT is to be deferred for this quarter, diarise a call now for the June payment. Likewise monthly payments of PAYE and NICs should be diarised so that the conversation with HMRC can be had in good time.
The Helpline’s opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm. The helpline will not be available on Bank Holidays.