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HMRC arrears: Reflection on 2025 and what's to come
Leonard Curtis successfully negotiated 222 Time-to-Pay arrangements in 2025 and maintained a high success rate of 98%, highlighting the team’s expertise and strong HMRC connections, which allows specialised support for businesses facing challenges.
In total, the team restructured £73m+ of tax arrears, supporting recovery across some of the UK’s most pressured sectors and protecting more than 17,000 jobs.
Sector Stats
The industries most affected remained hospitality, construction and recruitment, all particularly exposed to increasing costs or exceptional financial shocks. Other sectors in need of assistance included the manufacturing and healthcare industries.
Wage inflation and National Insurance increases along with high energy prices and on-going post-Brexit trade challenges have continued to impact British businesses.
Looking forward into 2026
The impact of changes revealed in the UK Government’s 2025 Autumn Budget will continue into 2026, whilst further planned increases such as business rates will leave businesses with increased overhead expenditure.
HMRC’s status as secondary preferential creditor increases the risk for funders and many now require formal Time to Pay arrangements to protect their position in light of heightened HMRC enforcement and recovery action. This in itself calls for longer-term financial planning and navigation of more complex agreements to allow otherwise viable businesses to prosper.
"The excellent performance in 2025 is testament to the hard-work and expertise within the team. Whilst longer-term arrangements are still possible, the early evidence in 2026 is that HMRC’s enforcement action is stiffening. As always, the sooner we can speak to HMRC the more likely it is that we can achieve a good result for all parties"
- Joe Douglas, Business Advisory Senior Manager
How Leonard Curtis can support
Our Business Advisory team is here to help businesses manage HMRC exposure and navigate uncertainty with confidence as we believe that proactive debt management is an essential business practice, necessary at any stage.
Our team also support accountants so if you have any clients in your portfolio who fit the below, we can help:
- are not filing VAT returns
- have HMRC arrears or need cash management support
- have received a request from their lender for an Independent business review (IBR) from an advisory firm
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Leonard Curtis is a trading style of Reach Commercial Finance Limited, registered at Riverside House, Irwell Street, Manchester, M3 5EN. Company Register number is 09056450. Reach Commercial Finance Limited is authorised and regulated by the Financial Conduct Authority, FRN: 753686. Reach Commercial Finance Limited is an authorised credit broker and not a lender. We work with an unrestricted number of lenders to find a potentially suitable arrangement for your consideration. ICO registration ZA069234 and you can check via www.ico.org.uk. We will receive commission from lenders. Different lenders pay different amounts depending on different commission models. For transparency we work with the following commission models: fixed fee, fixed rate of commission, percentage of the amount you borrow and rate for risk (this is based on the risk profile of the business). Further details of the commission model, calculation and amount will be disclosed to you throughout your customer journey. Privacy notice.
Leonard Curtis Legal Limited is a limited company, registered in England and Wales with registered number 09820186. Registered office: Riverside House, Irwell Street, Manchester M3 5EN. Leonard Curtis Legal Limited is registered with the Solicitors Regulation Authority with number 626004.