Time to pay assistance

[Derbyshire Duck]

Dear all

Any help most appreciated.

I run a small investment management business in the property industry. My draft accounts for my last financial year Apr 10 to Apr 11 show a taxable profit of c£150K and tax payable of c£33K. I understand this is due to be paid in Jan 12 (Is the tax due date 1st Jan or 31st Jan?)

My difficulty is that since Apr 11 my cashflow has suffered due to having to give up one mandate in order to concentrate on another. It's not appropriate to go into the reasons too much but I had little choice and in selecting the one better mandate my ongoing monthly income declined by c40%. From a strategic perspective the decision has paid off and I'm due to receive contractual bonus payments later in 2012 of c£180K around May/June and a slightly lesser amount in Aug/Sept (there are also further payments in 2013 and 2014). My client is a ultra high net worth private investor and the bonus payments are the result of hard endeavour over the last 3 years. There is an element of risk of course but the payments relate to gaining planning consents for town centre scheme which is fully pre-let and fully supported by the local Council.

My difficulty is that I'm going to struggle to pay the tax bill in Jan 12 as things stand. I'm trying different work ideas but without anything unforseen coming in I can stand to have spare only £15K to £20K.

It's been tough in my industry for a number of years. HMRC agreed to give me Time to Pay for my Jan 09 tax bill of c9 months and I paid up fully on time as agreed. Jan 10 I thought I'd have difficulty and my wife called HMRC around this time of year and they were having none of it. Fortunately I managed to work through and pay the tax bill on time.

Can anyone please advise how I can try and tackle HMRC this year? Unfortunately I don't have access to other means of credit at present. I don't have any CCJs or anything but rather simply my incomings and outgoings are not too healthy and I already had a few small credit card bills and overdrafts. I also cannot go to my client and agree some kind of advance payment without destroying the basis of the relationship.

Any thoughts or advice most appreciated.

DD

[pawncob]

The good news is that you can reduce your payments on account for 2011/12 to take account of your reduced profitability. Apply on line or by using the Claim to Reduce form available.
The bad news is that you'll still have to pay the balancing amount due in January 2012. Have you made any payments on account of this?
If you tell HMRC in advance you can agree a payment plan.

[mullet]

HMRC are getting more aggressive with time to pay ... the usual line is "we are not a bank" and that you should not repeatedly need such assistance. But this flies in the face of HMRC having dedicated time to pay units. It is certainly worth asking, but success is not guaranteed.