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Updated HMRC guidance on information required ahead of negotiations on PAYE Time To Pay arrangements

HMRC updated guidance on PAYE Time To Pay arrangements and an update on HMRC actions following excessive Job Retention Scheme claims

The furlough support is proving incredibly costly to UK.GOV and the latest eye-watering stats read as follows:

Total claims made as of midnightTotal number of jobs furloughedTotal number of employers furloughingTotal value of claims made
21 June9.2m1.1m£22.9bn

The period for COVID-19 related deferrals of tax payments is now coming to an end and therefore many businesses may be considering approaching HMRC to request Time to Pay (TTP) arrangements.

To save time and the potential of repeated calls, HMRC has issued updated guidance setting out what it considers as necessary information ahead of agreeing TTP arrangements with taxpayers.

This updated guidance also specifies certain conditions to be met in order for TTP arrangements to be agreed. Uppermost there is a requirement to commit to an upfront payment and not to include any PAYE/NIC amounts which have been covered by a Coronavirus Job Retention Scheme (CJRS) grant. Additionally the taxpayer should not seek to include tax liabilities arising after 30 June 2020 (the deferral period).

Although it is perhaps obvious, any proposal should detail precisely why TTP is required. This explanation should include details of what steps have been taken to seek funding elsewhere i.e. both internally (within a group of companies) and externally (banks/other finance providers). Do not forget to include details of how the business has fully utilised any and all other Government support. Please ensure that where a company is concerned, HMRC will expect an explanation of the current position on the payment or otherwise of dividends.

As previously, you must look to evidence the impact of COVID-19 on cash flow (impacts on turnover and on debtors/creditors) and seek to demonstrate the future viability of the business over the TTP period. It is vitally important that a robust and ultimately achievable proposal is put together and supported by evidence before approaching HMRC. There are no fixed parameters and HMRC are considering TTP proposals on a case-by-case basis, so presentation of the facts is critical to a successful outcome.

UK.GOV have also put forward a draft legislation on how HMRC will be intending to treat incorrect or excessive JRS claims, see our earlier blog found here.

We are also aware that HMRC are beginning to act on information related to false or inaccurate claims submitted under the JRS. Obviously with the cost of the scheme now exceeding £22.9bn HMRC are seeking to claw back what it can at the earliest opportunity. It is likely that the penalty regime for any deliberately false claims will be harsh and by the same token, inaccurate claims are likely to be treated in a similar fashion. It is extremely important that you take immediate professional advice should you be contacted by HMRC in relation to a perceived JRS overclaim in order that we mitigate penalties as best we can before HMRC proceed to issue determinations.

If you would like to discuss your approach to agreeing a TTP arrangement with HMRC, or if you have been contacted in relation to a potentially excessive JRS claim, please get in touch with either Dave Wase or Chris Watts of the investigations team.

FEATURING: Chris Watts
Chris is a Director based at the Torquay office and specialises in tax investigations, helping with both investigations at local compliance level and producing reports… read more
FEATURING: Dave Wase
Dave joined PKF Francis Clark in October 2018 after a 27 year career working for HMRC. Working as part of the tax advisory investigations team,… read more
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