What Happens If I Cannot Pay Corporation Tax?

Corporation Tax arrears can quickly become a serious issue for UK businesses. If tax remains unpaid, HMRC may charge interest, issue penalties, begin debt recovery action, or even pursue a winding up petition. Many companies experiencing cash flow pressure struggle to keep up with tax liabilities alongside rising operating costs and borrowing expenses. In some cases, HMRC may agree to a Time To Pay arrangement, allowing debts to be repaid in instalments. However, ignoring Corporation Tax arrears can increase financial and legal risks significantly. Directors should monitor their company’s financial position carefully and understand the potential consequences of continued non-payment.

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