Time to pay (TTP) schemes and Informal Debt Repayment Plans (IDRP)

As Licenced Insolvency Practitioners, Guardian Business Recovery (GBR) recognise that the main formal procedures, administration, liquidation and company voluntary arrangements, are not always the best solution for the distressed company and its creditors. We are often asked to give advice on how to restructure, reduce or temporarily suspend creditor payments while a short-term problem is remedied.

It may come as a surprise to many that it’s not just individuals that can enter a TTP or IDRP

If you are the director of a company you can reach an informal agreement with your creditors that will temporarily deal with trade debt from suppliers and even tax arrears due to HM Revenue and Customs (HMRC).
HMRC offices can agree TTP arrangements subject to certain limitations. If the arrears are small and it can be paid off within three months, the process will usually be straightforward. An initial upfront payment of as much as can be afforded will be required, with the balance of instalments to be collected by direct debit. However, for large debts and longer repayment periods more detailed information will be needed. If the sum involved in over £1 million and the repayment period is in excess of 12 months, a full Independent Business Review (IBR) may be needed. For anything in between, financial information such as accounts and cash flow forecasts will be relevant, and there will be a requirement to prioritise creditors, for example so the directors’ loans will not be repaid. In these cases directors will need to ensure that they have other key creditors on board.
At GBR we have created timetopay.co to provide a bespoke solution that can be tailored to the individual company’s circumstances and can help keep creditors happy, or at least docile, while you trade through a temporary cash flow problem. We are able to act quickly to provide the sort of relief from creditor pressure you need to get things back on track.

The service we provide is confidential and none of your creditors will know that you are taking advice unless you want them to.

What are the signs that you may need our help ?


Spending more time dealing with your creditors than running the business

Falling behind with payments to suppliers or being put on 'stop' or 'cash on delivery'

Regular calls, emails and letters from your trade creditors chasing your payments and letters before action threatening legal proceedings

Sleepless nights and a feeling of lack of control

Not answering the phone to creditors

Collection agents visiting your premises

Arrears of VAT, PAYE or Corporation Tax

Needing to avoid a formal insolvency and keep the problem confidential as far as is possible so as not to destroy an otherwise sound business

How does an informal debt management plan help ?

A well thought out informal debt management plan can provide comfort to :

The Management

by relieving pressure from creditors and allowing them the time to run the business, develop customers and create the cash flow that is needed to get the company back on its feet;

The Creditors

by allowing them to know where they stand, when they are getting paid and how much. Most creditors would rather have the truth explained to them and accept instalments than simply be ignored or incur collection costs and legal fees unnecessarily;

The Company

by providing a planned out and manageable cash outflow.

What will happen if I ignore the problem?

Generally speaking, no good comes of it.
We are not saying that it is impossible for the company to trade out of a temporary problem without engaging with creditors, but in our experience, which is very substantial, companies seldom do. An under-resourced business will just see what assets it has eroded to nothing if the problem is not addressed, Usually the situation worsens, key supplier relationships are jeopardized or HMRC lose patience and the directors’ options drastically reduce both in number and desirability.


What will GBR do for me ?
Meet You
We meet you face to face, if you prefer
Review accounts
We will review your accounts, tax compliance and payment history
Review creditors
We review all your creditors, and how far they have got in recovery proceedings
Consider financing options
We consider other forms of financing such as business loans, asset backed finance or invoice discounting that could provide a permanent and immediate solution
Discuss supplier priorities
We discuss the key or duress suppliers that may need to be paid in priority
Verify loans that need to be maintained
We verify any loan, overdraft or factoring covenants that need to be maintained and how these might affect your plan
Model business cash flow
We model your business cash flow
Schedule affordable payments
We calculate what the business can afford and schedule the payments (usually over 3 – 12 months depending on circumstances)
Help to negotiate 'time to pay' schedule
We assist in negotiating a “time to pay” scheme with HMRC, agreeable to both parties, that pays down old arrears gradually (usually over up to 12 months) and leaves you cash flow to meet current liabilities
Calculations for creditors
We calculate what creditors can expect to receive if they force the company into a formal insolvency, this will be attached to the communication with creditors, and will help concentrate their minds
Agree communications with creditors
We draft and agree with you the content of your communications with creditors, especially if they are to be asked for extended credit periods, which we find is less provocative than letters coming direct from a licensed insolvency practitioner
Directors risk assessment
We explain the risks for directors and how to mitigate them

What are the risks ?

There are three risks to the directors of a company proposing TTP or IDRP :

Risk 1
If the overall financial position of the company worsens during the operation of the TTP/IDRP, entering into an informal agreement of this nature could be an admission of, or at least a strong indicator of, insolvency. By proposing the TTP/IDRP, the directors of the company could make themselves vulnerable to a charge of wrongful trading under the Insolvency Act 1986 (IA86). In the event that the company eventually fails, and the final financial position is worse than it was at the commencement of the plan, directors could even be personally liable to the extent that the position for creditors deteriorates.

Regular monitoring of the state of the business by the directors and GBR, can let directors know, at an early stage, if their plan is working properly or if the towel should be thrown in and a formal procedure followed.

By paying key suppliers rather than treating all creditors equally the directors could be accused of a preference under IA86, and again held personally liable to the extent that other creditors have suffered.

This is why carefully prepared communication with creditors is essential to ensure they are on board. In the event that the plan fails and the company goes into administration or liquidation, wrongful trading and preferences are matters that may lead to director disqualification.

Risk 3
Creditors do not agree or just ignore your informal arrangement and proceed with enforcement measures to collect their debt. For example, an offer is made to HMRC which is declined, perhaps because of previous compliance history problems or poor accounting records. Enforcement is likely to follow in early course. Similarly, other creditors might want to get in first with their claims, if they see the business in in distress, by enforcing judgments and seizing assets.

As a GBR customer we will advise and assist you if this happens, with alternative exit routes mapped out in advance, and you will benefit from our standard fee reduction explained below.

How much does this cost ?

We charge a fee of £2,500 plus VAT to undertake the initial assessment, modelling and advice.

If you consider it necessary, and we would recommend that you do so for your own peace of mind, we can also undertake regular monthly monitoring, starting at £250 plus VAT per month, depending on turnover, so you are kept fully aware of the company’s situation at this crucial time.

What happens if I can’t keep up the payments ?

It really depends whether it’s a short-term problem caused by unusual circumstances, a more fundamental forecasting miscalculation, or an unforeseen deterioration of trading conditions.
Creditors should be kept informed so they can assess their exposure and the likely downside if the arrangement fails.
If you don’t make the payments on the due dates or incur new arrears with HMRC they could immediately terminate the arrangement and demand the full balance outstanding.
If all else fails you will still have the formal insolvency options available to you. As Licensed Insolvency Practitioners we can assist you with a transition to a formal process and advise you of the best solution, be it company voluntary arrangement, administration or liquidation. In that eventuality, because we will hold a lot of the information we need to proceed with this already, we offer a reduction in our standard fees for any given procedure of the amount that you paid for our initial advice, that is £2,500 plus VAT.
Basically you can roll the dice with an informal solution in the knowledge that, at worst, you are making a down-payment on fees that will be inevitably incurred if the situation requires a formal solution.

Contact us today


Call John Paylor on 020 3096 0750 if you would like to discuss your circumstances and how we could help you. Alternatively click below and arrange for a call back at a time of your convenience.


© 2012 GBR Corporate Ltd (No : 08314739)