Corporation Tax Arrears

Struggling with corporation tax arrears? We negotiate directly with HMRC to secure Time to Pay arrangements and stop enforcement.

Corporation Tax Arrears Help for UK Directors

If your company has fallen behind on corporation tax, HMRC will not wait long before escalating. Unlike PAYE and VAT, corporation tax is not held in trust, but HMRC still treats it as a priority debt and will move quickly from reminder letters to enforcement action. Our specialist advisors negotiate directly with HMRC’s Debt Management team to secure affordable repayment plans and stop enforcement before it starts.

Why Corporation Tax Arrears Happen

Corporation tax is due nine months and one day after your company’s accounting year end. For many directors, that payment arrives at exactly the wrong time, when cash flow is tight, a major client has paid late, or a bad quarter has followed a profitable year. A single shock can leave you facing a bill you genuinely cannot pay at short notice.

HMRC’s automated systems flag missed payments quickly. If you miss your payment date without making contact, you will receive a reminder letter, followed by a formal demand, and then escalation to HMRC’s Enforcement and Insolvency team. At that stage, your options narrow and the conversations become harder.

What HMRC Can Do If You Do Not Act

Unlike many creditors, HMRC does not need a court order to take action. If your corporation tax arrears are left unaddressed, HMRC can:

• Charge late payment interest, compounding from the day after the due date
• Issue a formal demand requiring immediate payment
• Send field force officers to your business premises
• Petition to wind up your company through the courts
• Use Direct Recovery of Debt powers to recover arrears directly from your business bank account without a court order

The longer the debt sits unaddressed, the fewer routes remain open to you.

Support Whenever Needed

Corporation Tax Time to Pay Arrangements

A Time to Pay arrangement is HMRC’s formal mechanism for spreading unpaid tax over monthly instalments. For corporation tax specifically, we regularly negotiate arrangements of 12 to 24 months, sometimes longer where cash flow forecasts support it.

Corporation tax is not held in trust, which means we have more room to negotiate than we would with PAYE or VAT. HMRC is more likely to agree a longer repayment window if we can demonstrate that the company is viable, that the arrears arose from a specific and explainable event, and that future trading will support the proposed payments.

We do not simply call HMRC and ask for a plan. We prepare cash flow evidence, pre-empt the objections HMRC’s Debt Management officers are trained to raise, and present a proposal that is structured to be accepted.

Loss Relief and Legitimate Reductions

Before we begin negotiating a Time to Pay arrangement, we assess whether the corporation tax liability itself can be reduced through Loss Relief. If your company has made a loss in a recent accounting period, it may be possible to carry that loss back against profits from a previous year, reducing the CT bill before we negotiate the remainder.

This is frequently overlooked by directors dealing with HMRC pressure on their own. Our advisors identify every legitimate reduction available before approaching HMRC, so we are negotiating from the lowest defensible figure.

What Happens if You Cannot Pay at All

Speak to an Advisor

Call 0333 898 0409 or request a call back at TaxDebts.