DMBM802230 - Time To Pay: Time To Pay requests: debts of £750,000 and over

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 How to identify a Time To Pay debt over £750k 

To identify if the debt in a Time To Pay (TTP) request is over £750k you should exclude any proposed due date payments. Only a liability outstanding after the due date will be included in the TTP debt. Question the customer about any other HMRC debts, this may include multiple HoD’s.

TTP requests greater than £750k must be dealt with by the relevant Large Debt Teams i.e. SA, CT, VAT, PAYE.

TTP can only be considered for current or imminent liabilities.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Challenging the customer’s TTP proposals

You should question the customer’s ability to pay. Try to obtain the largest payment immediately or by the due date:

  1. Have you any other HMRC debts or TTP arrangements?
  2. Are you due a repayment from another HOD?
  3. Have they had any previous TTP’s and did you keep that arrangement?
  4. What assets do they hold? Stocks, shares, cars, buildings etc.
  5. What have they done to try to raise funds?
  6. What changes are you making to meet future liabilities?
  7. Will there be a change in circumstances which may affect the TTP if agreed?
  8. Are there any returns outstanding?

If at any point during discussions you believe that the customer has the ability to pay in full or that their request is unacceptable, you should explain to the customer that the request is rejected.

TTP Rejection identified

You should summarise the details of the request on a Heads Up document and pass to an HO/SO for them to approve the rejection.

There is no upper limit on HO/SO rejection authorisation levels and it is not necessary to refer your decision to SCS to reject. Simply reject, and explain the reasons to the customer. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)       

Once the customer has been advised of the decision to reject, the insolvency warning letter (IWL) should be issued promptly on due date +1.  Where there is no IDMS work item (i.e. debt has not been downloaded at the point of rejection) a manual IWL should be issued.

If payment in full not received on expiry of IWL, refer to Enforcement Insolvency Service (EIS) for issue of a DDL.  

Where further evidence is required to inform decision

The HO/SO should establish whether it is appropriate to make a follow up phone call to challenge the proposals and/or ask for specific supporting evidence. Suggested topics:

  • How are bankers or financiers supporting the business and is this sufficient?
  • Have terms for loans been re-negotiated?
  • Have all creditors been fully stretched to support the cash flow?
  • Has the owner, parent company or shareholders been approached to provide additional financial support?
  • Have any outstanding Director’s loans owed to the company been paid back?

Focus should be on discussion rather than simply waiting on financial evidence which may delay the overall decision process. Only gather financial information if the proposal is worthy of serious consideration and the evidence will help inform the final decision. A cash flow forecast or management accounts may be required. Annual accounts can be obtained by searching Companies House beta service.

If evidence is required, the customer should be asked to submit this within a maximum of 48 hours.  Where the customer fails to meet the deadline or stalls for a delay, reject and continue with enforcement path.

Acceptance identified 

The HO/SO can authorise proposals up to £999,999.99. If acceptance is appropriate, advise the customer (verbally and in writing). Update the Heads Up document (This content has been withheld because of exemptions in the Freedom of Information Act 2000).

For requests of £1m and over, prepare your recommendation to accept on the Heads Up document (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Exceptional circumstances

Operational Accountant’s (OA) review

Exceptionally, proposals may need specific accounting expertise.  In these circumstances, it may be appropriate to refer to an Operational Accountant.

Independent Business Review (IBR)

Where we think it’s appropriate we may require the business to produce an Independent Business Review (IBR) to enable us to review impartially produced information before making a decision on the TTP request.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)