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Tax Payment Plan Case Studies

Sole Traders Self Employed Door-to-Door Sales Representative Self Employed Gardener Mortgage Broker Commission Only Sales Consultant Commercial Painter and Decorator

Partnerships Medium Size Fish and Chip Shop Law Firm Multiple Tax Arrears in Money Transfer Company Private Catholic School Commercial Events Managing Company

Limited Companies Web Hosting Company Administrative Support Company Architect IT Technicians High Street Retailer

Sole Traders

Self Employed Door-to-Door Sales Representative

Mr T was employed by a company on a commission basis contract. He had a tax liability of £12,448 in respect of an income tax liability for his self-assessment when he contacted our offices and was threatened with legal action if he failed to pay within 7 days.

Mr T was considering selling his freehold property in order to acquire the funds. After investigations we pointed out to HMRC that Mr T it would not be viable for Mr T to put his property on the market as the market valuation of his property was £254,950 in this period (£129,000 less than the value prior to the recession) and to avoid this we made an initial offer to HM Revenue & Customs (HMRC) of £650 per month which was affordable for Mr T HMRC was agreeable to our proposal.

Our fee was £1150.

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Self Employed Gardener

A client contacted our offices with a tax problem which he required urgent assistance with his outstanding income tax liability of £3,200. He had previously been struggling to meet his monthly payments to HMRC and other creditors.

Furthermore, the gardener was always subject to income fluctuations due to the fact he was only really busy in the summer and no one used his services in the winter.

Once we were instructed by the client we did an in-depth analysis of his situation and accounts taking into account his Income and Expenditure. We made a proposal to HMRC to pay the liability over a period of 14 months.

Our proposal was accepted and the cost of our service was just £525 inclusive of VAT.

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Mortgage Broker

We were approached by a one of our registered introducers who had a Self Assessment Tax bill of £13,700. The Introducer was under pressure to repay HMRC, however due to the economic downturn, he had suffered a loss in income. Our Tax team were able to deal with him over the phone and negotiated a Time to Pay Plan with affordable monthly repayments of £600.

Since then our broker has referred 3 other clients who we have been able to assist and has also managed to earn favourable commission.

The cost of our service was £1035 inclusive of VAT.

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Commission Only Sales Consultant

Mr B found us on the internet and contacted us for help with his tax debt. He owed £10,321 in respect of an income tax liability.

We made an initial offer to HMRC of £525 after working closely with Mr B to determine what he could afford to pay on a monthly basis to HMRC. However, after his 3rd payment to HMRC Mr B soon realised that he is struggling to meet the monthly payments and was falling into debt with other creditors. We were able to contact HMRC and negotiate a 3 months reduced concession period to allow the client some breathing space to continue to raise the funds to repay his debt.

We charged the client £948 inclusive of VAT.

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Commercial Painter and Decorator

A self employed painter & decorator incurred a self assessment tax liability which was required to be paid immediately. However, the painter unfortunately fell from scaffolding, breaking an arm & leg, which rendered the individual unable to work. His usual annual income was around £40,000 which was reduced to £28,000 after his accident. As he had been out of work due to his accident, he was unable to make the payments on account when the tax became payable.

His accountant referred him to us, and we acted as an interface between him and HMRC to obtain a payment arrangement that was affordable to the client. We also froze all interest and surcharges that were being applied on the outstanding tax liability.

Our fee was £2,300 inclusive of VAT.

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Partnerships

Medium Size Fish and Chip Shop

Mr & Mrs S owned a medium sized fish and chip shop and employed 3 other staff. Over the years they built up multiple tax debts. They had a PAYE liability of £17,660 and a VAT liability of £11,000.

They were keen to overcome their problem and turned to their accountant for help. However, their accountant was unsuccessful in reaching an agreement with HMRC and he quickly realised they would need to instruct tax specialists to overcome the tax problem.

They instructed our tax consultants on the recommendation of their accountant. However, once we were instructed we quickly found that HMRC were demanding payment in full.

We were able to combine the two liabilities and offer a realistic repayment proposal of £2,500 per month. Over the years Mr & Mrs S had a number of problems with HMRC and had a bad payment history. However, after carrying out an analysis of the business and financial our proposal was accepted after lengthy negotiations.

Our fees were £3,220 inclusive of VAT.

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Law Firm

With the credit crunch taking into effect around August 2007, a high street law firm didn’t start to experience financial difficulty until well into 2008 when the property market significantly dropped. Mr F who primarily dealt with conveyancing subsequently experienced a reduction in fee income and with having major overheads, it was not long before the firm fell behind on payments of VAT, PAYE, and the partners self assessment income tax. In 2009, they had accumulated around £500,000 of unpaid tax that needed urgent attention.

We were able to successfully negotiate an extremely favourable time to pay arrangement for Mr F and his partners with HMRC.

Our proposal of £4000 was accepted and we were successful in getting all Surcharges & Penalties frozen. This saved approximately £80,000 per annum.

Our fee was £14,000 inclusive of VAT.

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Multiple Tax Arrears in Money Transfer Company

Mr. and Mrs. D had multiple tax debts which had built up over a period of 5 years. They had a VAT liability of £21,660 and an income tax liability of £13,000. They were referred to us by their accountant who was unfortunately unable to successfully negotiate an arrangement with HMRC.

We liaised with the two separate HMRC Offices who dealing with their case. We made a proposal to pay by £211.33 & £121.23 respectively each month to settle both taxes which was accepted by HMRC.

We charged the client £2072.44 to deal with both tax matters.

We charged the client £8,000 and saved him over £30,000 which he would have had to pay in surcharges and interest.

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Private Catholic School

The independent school had been struggling for the last 6 years due to the low numbers of students being admitted into the school together with the increasingly demanding legal requirements.

The school was able to find funding which allowed the school to continue to trade. However, the underlying problems which initially caused cash flow problems had not been addressed and as a result losses continued to be suffered.

As a result, tax arrears comprising PAYE/NI of £139,000 were accumulated. With our assistance a stand-still arrangement was secured and, during this period, a sale of the school took place.

The tax arrears were subsequently repaid in full by the new owners.

We charged the client £5,400 inclusive of VAT.

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Commercial Events Managing Company

We were called in to help a large events organising business that saw a reduction of 30% in bookings. The company found themselves to be struggling to meet their tax liability. However, despite many warning letters and threats from HMRC the company failed to make their tax payments. The company was served with a winding up petition and upon our instruction we were able to provide tax arrears advice and put in place a turnaround plan and PAYE/NI and VAT arrears of £312,000 were restructured over a realistic 14 month payment.

The petitioners HMRC were willing to accept our proposal and the hearing was dismissed.

We charged the client £9,000 inclusive of VAT.

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Limited Companies

Web Hosting Company

A relatively new company that had only been trading 3 years who offered a range of web and e-commerce services to businesses instructed our offices due to their cash flow problems. The company encountered many problems with some managers and to resolve the issues proved to be costly for the business. The company feel into arrears with HMRC of £212,000 which was mainly built up of interest and surcharges. The company tried excessively to negotiate with HMRC but all attempts were unfortunately unsuccessful and they could not come to an arrangement. The maximum the company could afford to pay was £18,000 per month but this meant cash flow was tight to service the business.

Express Tax Solutions provided tax arrears advice and put in place a turnaround plan and PAYE/NI and VAT arrears of £212,000 were restructured over a realistic 14 month payment term of payments of £15,000 per month which was realistic and affordable to the company.

Our fee inc VAT totalled £3,900 inclusive of VAT.

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Administrative Support Company

Mrs G had an outstanding income tax liability of £19,237 which she could not afford to repay. She had many personal problems as he husband fell ill and was unable to work which meant that she had to run the household solely on her income. Understandably Mrs G was extremely stressed when she contacted our offices.

She had contacted HMRC and told them her circumstances. HMRC subsequently offered monthly repayment terms, but were insistent on a lump sum payment of £7,000 being made before any monthly payment arrangements could be put in place. This was not affordable to Mrs G.

Once we were instructed we supplied HMRC with a financial breakdown, and explained that our client was actively looking to raise additional funds within 12 months. We successfully negotiated a lump sum payment of £3,500. The total debt was later also repaid within 6 months.

Our client paid £1,862 to manage the whole process.

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Architect

An architect who was running his own business experienced a dramatic fall for his services when the property market was hit with the recession. His work dropped by up to 60% and this left him facing PAYE arrears of £18,000 which he could not afford to pay. We were able to successfully negotiate with HMRC for this tax to be repaid over a 14 month period and for the first payment to be made within 6 weeks of the proposal being accepted by HMRC.

Our fee was £1700 inclusive of VAT.

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IT Technicians

We were called in to help a relatively new IT company offering unique business solutions various businesses. As the owner invested a mass amount of money in setting up the business (too much too quick) he soon discovered that there was no cash left to meet general overheads and expenditure outweighed the income severely.

The company owed VAT totalling £202,000 and were unable to pay the suppliers who were threatening bankruptcy action against them.

We quickly informed the business owner of his options and advised that the best way forward would be to do a pre pack administration as it would be impossible to repay all the creditors and if action was not taken he would be made bankrupt which would mean he could not be a director of a company for a period of 5 years and that he would have to disclose his bankruptcy status when applying for new jobs.

We successfully closed the company down and set him up with a new one that was identical to the original company except had a slightly different trading name.

Our fee was £6,500 inclusive of VAT.

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High Street Retailer

A well known retail shop faced slowing consumer demand over the years. Its usual annual turnover was over £100m and the company found itself to be struggling to meet its other financial commitments.

The Company was unsuccessful in arranging external investors to invest into the company and the business's bankers were unable to provide them with any further funding.

There were lengthy negotiations with HMRC who had already issued winding up action against the company before we were instructed. We successfully managed to adjourn the hearing and in the moratorium period we worked with the company to secure payment arrangements and rescheduling outstanding tax liabilities comprising PAYE/NI and VAT totalling £1.6million, over a 12 month period.

These actions have eased cash flow and enabled the company to instigate operational changes to ensure continuity of trade.

Our fees for our services were £7,800 inclusive of VAT.

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Read More on Tax Arrears & Tax Payment Plans

Links to other pages within expresstaxsolutions.com which are related to Tax Payment Plans:

• Tax Payment Plans
• Why do Tax Arrears Arise?
• Tax Payment Plan FAQ's