Case study
Case study: Five-year Time to Pay agreement secures stability for Midlands hospitality business
Background
A Midlands based hospitality company faced mounting financial pressure following a sharp increase in operational costs. The rise in the national minimum wage significantly impacted the business as most of its workforce was within that pay band. Changing consumer habits after the pandemic also impacted profitability as more customers ordered through delivery platforms, which charge commission rates of up to 30%.
In 2024, the company opened a new outlet that underperformed, losing around £900 per week. This further strained cash flow and made it difficult to meet ongoing PAYE and VAT commitments. The company agreed an initial six-month Time to Pay (TTP) arrangement with HMRC, but it became unsustainable as new liabilities arose.
Challenge
With trading pressures continuing and HMRC arrears increasing, the business risked their liabilities becoming insurmountable. The client needed a practical solution to ease short-term cash flow pressures while maintaining operations and safeguarding employment.
Solution
After assessing the company’s current standing and financial position, Business Advisory Analyst Ben Powell engaged directly with HMRC to agree a revised repayment plan. Through these discussions, a sustainable five-year Time to Pay arrangement was secured with manageable monthly repayments of £1,900.
Outcome
The TTP arrangement provided the business with financial breathing space, stabilised cash flow, and safeguarded several jobs. With the pressure eased, the company was able to continue trading and focus on future growth.
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