What is a Time to Pay Arrangement?
A Time to Pay arrangement is an agreement between a Company and one creditor, usually HMRC, that allows the Company to pay off its debts in manageable instalments over an agreed period. This is particularly beneficial for businesses that have fallen behind on tax payments or other debts but are still capable of making regular payments.
At Cheap Liquidation, we are experts in negotiating TTP arrangements and are happy to assist you with getting the best possible outcome.
How long will my Time to Pay Arrangement last?
The duration of a Time to Pay arrangement can vary significantly based on the total amount of debt, the Company’s financial situation, and the agreement reached with creditors. Time to Pay arrangements are bespoke, but generally, TTP arrangements can last anywhere from six months to several years. Common repayment periods include:
Short-term TTP (6-12 months) – Suitable for small debts or temporary financial difficulties.
Medium-term TTP (1-3 years) – Often used when the Debtor can manage a more substantial amount but needs time to recover financially.
Long-term TTP (3 years or more) – This may be necessary for significant debts where the Debtor’s financial recovery is expected to take longer.
What are the requirements for a Time to Pay Arrangement?
To qualify for a Time to Pay arrangement, the Company must demonstrate its financial situation and ability to make regular payments. Key requirements typically include:
- Financial Disclosure – The Company must provide details of its financial situation, including income, expenses, assets, and liabilities. This is crucial for assessing the Arrangement’s chances of success.
- Payment Proposal – the Company should propose a realistic repayment plan that outlines how much it can afford to pay each month. This proposal should be based on a thorough assessment of the Company’s financial position.
- Engagement with Creditors – Communication is vital. The Company should proactively engage with its creditors to negotiate the terms of the TTP arrangement, demonstrating its commitment to resolving its debts.
- Adherence to Terms – Once an arrangement is in place, the Company must adhere strictly to the payment schedule agreed upon. Failure to do so may result in the Arrangement being revoked.
We have a good working relationship with HMRC and can use our expertise in this area to negotiate on behalf of your company, to ensure the best possible outcome is achieved.
Could the Proposal be declined?
While Time to Pay arrangements can be beneficial, not all companies will qualify. In our experience, factors that may lead to a decline in a TTP arrangement include
- Insufficient financial evidence
- History of non-payment
- Unrealistic payment proposals
- Ongoing legal proceedings
We will work with you to ensure that your proposal contains all the information necessary to give it the best chance to succeed.
Conclusion
Time to Pay arrangements can serve as a valuable tool for businesses seeking to regain control over their finances. By understanding the duration, requirements, and potential pitfalls of a TTP arrangement, you can better navigate your financial challenges. It is always advisable to seek professional advice from an Insolvency Practitioners to explore all options available to you, taking into account your specific circumstances, before deciding on the most appropriate solution. The team here at CheapLiquidation.uk are ideally placed to give you the help and advice you need.
FAQ’S
Q: What happens if my TTP is declined?
A: There is no immediate impact on the Company, but the Directors have acknowledged that the Company is unable to pay its debts as and when they fall due and so it is likely that the Company is now facing liquidation. Click Here for our guide to a director’s responsibilities when faced with an insolvent Company.
Q: Can I be personally liable for my company’s debts?
A: In the UK, a limited company is a separate legal entity from its directors and therefore generally speaking, a director cannot be held personally liable for a Company’s debts. There are, however, a number of exceptions. Click here for a full explanation.
Q: Are there any alternatives to Company Liquidation?
A: Yes, there are a number of options, depending upon the overall viability of the business. Liquidation need not be the only option.
Should you wish to explore any of the matters in this article in more detail or seek a bespoke solution for your company, call 03303 411 285 for a free, confidential, no obligation conversation about your options.
