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Business Payment Support Service - additional information for tax agents and advisers

The scope of the service

This new service is designed to assist all businesses (large and small) and individuals that will be unable to pay their tax. The service is primarily available to self-employed people and companies but can be used by any of your clients who are having difficulty in meeting their tax liabilities. It covers most taxes and duties including Income Tax, Corporation Tax, VAT, PAYE and National Insurance.

In order to qualify the business/client will be:

  • in genuine difficulty
  • unable to pay their tax on time
  • likely to be able to pay if HM Revenue & Customs (HMRC) allowed them more time

For our part, we will look to be flexible and agree Time to Pay arrangements on a case-by-case basis to bring the business's/client's tax back up-to-date on a timescale that is reasonable and appropriate to the situation.

We would very much encourage all agents and advisers to advise clients to make use of the service where it is appropriate to do so.

Using the service on your client's behalf

If you have authority to act on your client's behalf, through a form 64-8 or an online agent authorisation, we can discuss your client's tax affairs with you. We can also agree a payment arrangement with you - but we may also need to speak to your client to set up payments through direct debit.

If you wish to discuss a client business' payment position before a demand has been issued and you hold an authorisation to act on behalf of that client, you should call the Business Payment Support Service line on Tel: 0845 302 1435.

In many cases the Business Payment Support Service will be able to consider the request and give you a decision within ten minutes. Where the situation is more complicated or larger amounts are outstanding the details may be passed to another office for them to look at in more detail. Where this is the case you will be called back within four working days and we will require more detailed information from you before making a decision.

If a demand has already been issued you should contact the telephone number on the demand notice.

For all other issues you should continue to use the regular contact numbers, such as the Agent Dedicated Lines for Self Assessment and PAYE matters.

Surcharges

VAT default surcharges will not be charged if the business contacts us before the payment is due and we agree a Time to Pay arrangement which is adhered to. Entering into the Time to Pay agreement will not be treated as a default so it will not extend the 12-month rolling period nor will the default percentage increase because of the Time to Pay arrangement, provided the terms of the arrangement are adhered to.

VAT returns must still be submitted on time or this will be treated as a default and the 12 month rolling period will be extended.

Similarly, a surcharge can be avoided on late payment of Income Tax where a Time to Pay agreement is entered into before the relevant surcharge date and the terms of the agreement are adhered to.

Payment status for subcontractors

If your client is under the Construction Industry Scheme and makes a Time to Pay arrangement before a payment is due, it will not affect their gross payment status.

Guidance on using the Business Payment Support Service and the impact on subcontractors' gross payment status

Partnerships

Where multiple partners are unable to pay their individual liabilities on time we can discuss a time to pay arrangement for any partnership liabilities and the individual partners’ liabilities with an authorised representative of the partnership providing the following conditions are met:

  • all partners must be individuals
  • all partners must have a Self Assessment record, and have filed the relevant Self-Assessment return
  • no partner should be subject to enforcement action to recover their debt

When you contact the Business Payment Support Service they will ask for the details of the outstanding liabilities and the details of the individual partners who are unable to pay. This information will be passed to another office who will contact you back within four working days to discuss the situation with you. Where the representative doesn’t hold the relevant authorisation from the partnership and the individual partners then they will need to submit a letter detailing:

  • representative’s name and company name (if appropriate)
  • representative’s full postal address
  • representative’s telephone number
  • name and reference(s) of the partnership
  • name and reference numbers of each individual partner
  • details of all amounts owed by both the partnership and the individual partners

The letter must also confirm that all of the partners are giving their authority for the representative to act on the partners’ behalf in respect of their Self Assessment liability and the partnership’s other HMRC liabilities (if applicable). The letter must be signed by each individual partner.

We will discuss the situation with the representative and where the partnership and the partners are viable we will look to enter into an appropriate arrangement to allow the debt to be cleared and future liabilities to be paid on time. In larger debt cases we may require additional evidence for us to assess viability.

Where a payment arrangement is agreed our preferred method of payment is by direct debit from the partnership bank account. By completing a single direct debit mandate we can arrange payment to be made by up to 99 reference numbers. Otherwise representatives must make sure that payments for each individual partner and partnership liability are made separately.

Reviewing or extending the arrangements

If the circumstances of the business/client change and they become unable to make the payments covered by the agreement, as well as keeping up to date with any new liabilities, then we will want them (or their agent) to get in touch with us before they miss any payment.

Provided we are satisfied that the business continues to be viable we will consider amending and extending the agreement. However it is likely in such circumstances that we will need to ask more detailed questions of the client in order to satisfy ourselves that the business is indeed viable and capable of sustaining a realistic arrangement. This may mean that such discussions will not be handled as quickly as an initial approach to the Business Payment Support Service and may need to be transferred to a specialist unit to deal with.

Repeat Arrangements

If your business has already had a payment arrangement with the Business Payment Support Service you can still contact us if you are again having difficulty making subsequent payments. If you have previously been helped by the service we will ask more in depth questions to establish if the business continues to be viable. Where the business continues to be viable we will consider another payment arrangement.

The Business Payment Support Service was set up to help business with short term difficulties and was not intended to be an ongoing source of working capital for businesses. Where possible we expect businesses to seek other sources of finance and/or take action to restructure to enable payments to be made on time.

Appeals and complaints where agreements cannot be reached

There is no statutory right of appeal against our decision to not allow a Time To Pay request, however if you think we have been unreasonable in refusing a request you can contact us in the normal way and ask for our decision to be reviewed, just as you would any other decision with which you were unhappy.

For more information about Time to Pay where large amounts are involved you can consult the HM Revenue & Customs Debt Management and Banking Manual.

Debt Management and Banking Manual: Time to Pay

31 January Self Assessment payment deadline

We hope that you will encourage your clients to use this service.

The days leading up to 31 January are likely to be a very busy period for the Business Payment Support Line. With this in mind we would ask you to contact us early once the Self Assessment liability is established and payment difficulties have been recognised.