Debt Solution for Personal and Business HMRC tax Debt

Dealing with Personal and Business HMRC tax Debt? Get Solution Today

HMRC has the authority to seek personal bankruptcy if your personal tax debt reaches or exceeds £5000. During the 2019/2020 fiscal year, HMRC filed 5604 bankruptcy petitions, handling over 6.5 million tax debt cases.

For those unable to pay their HMRC tax debt in full or on time, HMRC may offer two alternatives:

  • Settle the debt as soon as possible.
  • Arrange affordable monthly repayments within an agreed timeframe.

Given the diverse nature of tax debt liabilities, our office tailors debt solutions to individual needs. Some cases may escalate to court action initiated by HMRC for debt recovery, adding complexity.

Unless there are suspicions of criminal activity or fraud, our office engages with clients to devise a suitable debt repayment plan. This plan aims to make HMRC tax debt manageable through affordable and sustainable monthly repayments.

Debt Solution for Personal and Business HMRC tax Debt

Struggling with HMRC TAX Debt? Get Advice Today

HMRC and tax debt collection companies

HMRC has the authority to transfer tax debts to designated debt collection agencies. Consequently, you might receive additional requests to settle either the entire tax debt or a portion thereof. Both HMRC and the debt collection agency have the right to contact you concurrently to address the specified portion of your tax liability.

Our office handles interactions with these debt collection agencies on behalf of numerous clients with tax debts, including limited companies and individuals.

  • LCS
  • Advantix Credit Ltd
  • Bluestone Credit Management
  • BPO Collections Ltd
  • CCS Collect
  • Moorcroft Debt Recovery Ltd
  • Past Due Credit Solutions
  • Oriel Collections

How Can we help in HMRC Tax debt?

HMRC views tax debt as a priority and aims to avoid establishing a precedent that suggests they are lenient regarding repayment arrangements or extended delays in collecting taxes owed.

For HMRC tax debts, there are several solutions available, applicable to both personal and business tax liabilities:

  1. Time to Pay Arrangement (TTP): A TTP arrangement permits struggling businesses and individuals to repay various HMRC liabilities, including self-assessment tax arrears, corporation tax, PAYE/NI, VAT, CIS, and other outstanding amounts in installments rather than in a lump sum.

    Our Objectives with TTP:

    • Spreading the debt repayment over time improves cash flow, ensuring funds for essential expenses like rent, wages, and suppliers.
    • For personal tax debts, we conduct fair financial assessments to determine a manageable monthly repayment aligned with your disposable income.
    • Opting for TTP demonstrates a commitment to repay, fostering positive relations with HMRC and reducing the likelihood of enforcement actions.

    The TTP Process:

    1. Assessing the financial situation to tailor a suitable plan.
    2. Developing a repayment proposal incorporating reasons for missed payments and financial circumstances.
    3. Negotiating a structured repayment plan with HMRC.
    4. Commencing the arrangement upon HMRC’s acceptance, concluding upon full repayment, including interest and fees.
  2. Alternative Solutions for Business Tax Debt: If TTP is not viable due to debts to other parties or past TTP failures, alternative options exist:

    • Company Recovery: Stay operational while repaying debts through a Company Voluntary Arrangement (CVA) or consider restructuring via company administration.
    • Company Closure: In cases of substantial debt, closing through a Creditor’s Voluntary Liquidation (CVL) may be preferable to avoid compulsory liquidation by creditors, involving the sale of company assets.

Personal Tax Debt Solutions:

1. Time to pay arrangement (TTP)

The Time to Pay (TTP) scheme offers an informal debt resolution option that doesn’t appear on the UK government’s personal bankruptcy register. It requires consistent and manageable disposable income, and it’s advantageous to contribute lump sum payments to lower your tax burden while under a TTP agreement. This approach reduces debt exposure and minimizes the likelihood of formal debt recovery measures like bankruptcy or IVA. For instance, by reducing your tax debt to below £5,000.

TTP is particularly effective when you can settle your entire tax liability within a year. However, if repayment is challenging within this timeframe, we can assist in extending your TTP arrangement for a more extended period to ensure manageable repayments.

2. Debt Management Plan

DMP is an informal debt solution and if you have other unsecured personal debts including credit cards, personalloans, store cards and HMRC tax debt then we can combine your all unsecured debt liability with in debt management plan so you pay one affordable monthly repayment after consolidating all your debt by DMP. Under a DMP plan, we aim to freeze interest and charges on your credit cards and store cards. HMRC does not freeze interest on their tax liabilities.

3. Bankruptcy

If HMRC petition for bankruptcy then a personal bankruptcy order is likely to be granted by the court for HMRC tax defaulter and if the tax debt is over 5k.

It is very serious matter for any individual and family as it is serios step which has pitfalls for now and future and it is likely to affect your employment, self-employment, tenancy, properties, shares / stocks, companydirectorship, car insurance renewals and other valuable assets you may have. Please speak to a debt advisor ASAP if you are facing personal bankruptcy risk.

4. IVA

IVA can be proposed by an insolvency practitioner who submit information about all your debts, income and expenditure and assets summary to work out a repayment plan. IVA is a legally binding debt solution and a formal debt solution. Your name will appear on UK government’s bankruptcy register if you are subjected to IVA solution for your personal debt. You must seek proper debt advice before entering into a formal debt solution as IVAis likely to affect your finances, assets and professional life.

5. Debt Relief Order

DRO is also a formal debt solution and legally binding. If you have very few assets (not exceeding £1000.00 in total) and your total debt level is under £20,000.00 then you may be qualified for DRO. DRO procedure is low cost and easy for people who fits in the criteria of low disposable income of less than £75.00 per month, less than 20k combined debt and less than 1k value of total assets.

Worried about HMRC TAX Debt? Get Help Today


  • Rajnish Tyagi

    Rajnish Tyagi possesses certification as a qualified debt advisor and specializes in writing about debt management and related topics. His aim is to assist individuals in comprehending and effectively managing their debts and credit issues. Additionally, Rajnish Tyagi holds the position of managing principal at "Acme Credit Consultants Ltd," an FCA regulated firm that provides tailored debt solutions to both individuals and businesses facing financial challenges.

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