Credible plan key to HMRC being ‘very understanding’
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HMRC continues to be “very understanding” of current business challenges, but struggling businesses need to have a credible plan they can stick to.
That is the view of finance experts speaking on a TheBusinessDesk.com webinar, Is your business financially ready for the battles ahead?, which was delivered in partnership with Leonard Curtis and JMW.
“We’re seeing HMRC be very understanding of the situation,” said Sean Williams, director at Leonard Curtis. “I think it depends on how you put the proposal to them.
“Often it is HMRC who is the most pressing creditor and we have a team that specialises in them for that reason.
“Generally speaking we will put a proposal with some cash flows, an estimate to show if the company goes into an insolvency procedure, this is what they’ll get versus a payment plan.
“But it does have to have some thought behind it – and you need to be able to show what’s changed, because the important thing once you’ve agreed a time to pay is that not only you have to stick to those payment terms, but you’ve also got to stick to the new tax bills as and when they fall due.
Fiona Parkinson, regional managing director – North, Close Brothers, agreed, saying “in the main HMRC has been very supportive”.
She said: “The message that we give to our clients – and that we’ve always given to our clients – is that you need to have a plan, you need to get into contact with HMRC and agree a plan, but importantly, that plan has to be credible. It’s got to be affordable.
“There’s no point putting something forward that you’re going to end up in a default position in a couple of months’ time.
“It’s all about communication, making sure you don’t put your head in the sand and you’re taking advice, and you’re looking at what solutions are out there.”
Rob Burton, corporate finance partner at Garbutt + Elliott, emphasised that the communication needs to be with HMRC and also with your funders and advisors.
“If you don’t understand what’s out there ask the question because the the answers could present themselves. It’s understanding from your funder and from your advisors, what is available.
“Yes, there are bills to pay down the line. But it’s making sure you’re in a place to understand where your business is going. Focus on the cash and work closely within your business and with your team of advisors. That has to be the right advice.”