17th June 2024
It has been a busy start to 2024, with the team agreeing 81 Time to Pays (TTPs) in just the first five months of 2024 – almost 2.5x the number of arrangements that had been agreed in the same period last year.
A key observation is the size of the debts, with the average debt size increasing from c£400k in 2023 to more than £700k in the year to date. This highlights the significant challenges being faced by businesses in the current economic climate.
The size of businesses we’ve assisted has also increased, with the average turnover of businesses we’ve supported increasing from c£5m last year to c£12m in the current year.
We’ve assisted businesses across a range of sectors, however, key areas of concern appear to be hospitality, recruitment, and manufacturing – which is perhaps due to the rising cost of labour following the cost of living crisis.
We are still seeing HMRC agree to longer term TTPs (2-3 years) on debts sub-£350k and that are still early in HMRC’s recovery process. However, in recent months, we have seen in increase in the escalation of cases to HMRC’s Enforcement & Insolvency (E&I) team, particularly in cases with poor compliance and larger debts (>£350k). Once at the E&I stage, HMRC are returning towards their pre-pandemic stance of three months maximum to repay the debt.
We would always recommend being proactive to get something agreed before enforcement action from HMRC commences to provide the best chance of securing extended terms.
To find out more about how Leonard Curtis can support your clients or business when under pressure from HMRC, visit www.leonardcurtis.co.uk, email max.richardson@leonardcurtis.co.uk or call 0161 835 1900.