Can’t pay your creditors? Don’t panic!

*Note – Although we’ve written this during the COVID-19 pandemic the advice is relevant for other times too*
 
Everyone can have cash flow problems and these can cause a lot of worry for you, distracting you from running your business, so it’s important to ensure you get a plan in place to ease the worry. Speaking to your creditors is the first port of call, communication is key in a situation like this, many will have been there themselves and this is where those personal relationships you’ve built up will help lots, being honest with people and giving them an estimate for when you can pay will let them know where they stand and they can then decide if they’re happy with your plan, this could be the difference between them putting you on stop or letting you have another order of parts to complete a big project that brings in those much needed funds.
 
HMRC are likely to be one of those creditors and they shouldn’t be ignored, they too like communication and they’ll work with you to ensure you can pay you bill and get yourself back on track – they want you to stay in business so you’ll earn them more taxes! As soon as you know you’re not going to be able to pay your bill call HMRC to arrange your payment plan with them, don’t wait until it’s due or overdue, showing them you’re aware its going to be a problem and you want to sort a plan before will help a lot, they will be happier knowing what’s going on and it will remove a lot of stress from you too! 
 
Filing your return late won’t help, that just creates fines for late filing on top of the problem you have with not being able to pay, so keep on top of your filing. This will also mean when you call everyone is working from up to date figures.
 
Make sure when you call them you’ve got your reference number to hand and details of what it is you can’t pay. If you’ve an idea of what you can pay now and what you’d like your payment plan to be that will help, they will usually push for a payment of some kind to start the ball rolling while you’re on the phone so be ready for that! Again, having all this planned out shows you’re trying your best so helps with the situation. 
 
You will usually be asked why you can’t pay, as they’ll see it as you’ve had the money in so should have put it aside for them, although few businesses actually do this as using it to pay other bills is what everyone does! They may well ask about known future income, expenditure and savings & assets, they’re not just trying to squeeze every penny from you, they’ll be trying to make sure that the payment plan balances being realistic as well clearing your balance – neither of you want to be going through this again when you’re next payment is due and it will only cause you more stress! 
 
Right, now you’ve got it all planned it’s time to give them a call. You can contact the Payment Support Service on 0300 200 3835, Monday to Friday 8am – 8pm & Saturday 8am – 4pm (obviously at time of writing). If you’ve missed your Self Assessment payment date you’ll need to call 0300 200 3822. More information on the Payment Support Service can be found here.
 
Obviously if you’re a client of ours then we’re here to help you, we can help with all of the above, you don’t need to worry alone! Please do get in touch and please do not be embarrassed, it’s such a common problem for many companies so you shouldn’t feel ashamed! We know so many people delay asking for help and talking to creditors because of how they feel, we won’t judge you!
 
*During the COVID-19 pandemic they’ve temporarily changed the hours to Monday to Friday 8am to 4pm – They’ve also setup another number during this time, 0800 0159 559, again Monday to Friday 8am to 4pm*