Christopher Andersen
Written By Chris Andersen
Director & Licensed Insolvency Practitioner
July 11th, 2023


Are you facing VAT Arrears? Here at AABRS we have many years experience advising limited company directors in this situation.

Late Payment of VAT is something HMRC take very seriously,so we recommend you keep in regular communication with them to ensure the situation is not escalated.

What Happens When You Can’t Pay VAT?

As soon as you are seven days late you’ll being receiving demand letters, which will grow more aggressive in tone as time passes. You should be aware that HMRC is not bound by the same constraints as other creditors such as legally proving the validity of their debt before commencing legal action.

HMRC has a systematic process of escalation in places which moves from letters to personal visits from their officers, penalties and fines. It’s crucial to maintain clear and regular communication with them so you can maintain awareness of how they are feeling about your situation, and the potential for the escalating it further. At a certain point, they are happy to wind up a company if they feel they have exhausted all other options.

Can You Negotiate Time to Pay VAT with HMRC?

HMRC are open to Time to Pay agreements for VAT, providing you have not had one very recently. There is some small room for negotiation about the timeframes for these although there are maximum timeframes they won’t go beyond. Any commitment you make must be solidly adhered to because failing to keep to a time to pay is a sure way of incurring their wrath.

We are experienced mediators with HMRC over large TTP arrangements, so please make contact with us if you would like some advice about your situation.

Is Your Limited Company Already in VAT Arrears and facing Escalation?

Where this has already happened, and you are receiving letters without the wherewithal to pay, you need to the best options for the survival of your company. We both company rescue and insolvency experts, so please make contact with us for a free discussion where we can best advice you on how to get through this.

Call us now on 0208 444 3400 or use the live chat to talk to an expert right away. We can help.