Financial planning The HMRC employees that care home


owners speak to are rarely familiar with running a care home, managing cashflow, or dealing with delayed local authority payments. They are focused on collecting the tax owed, not on how the business operates or where the money comes from. Even when circumstances are difficult, HMRC’s priority remains the same – the debt must be paid. This highlights the importance of my


earlier point regarding seeking independent advice before agreeing to anything. Specialists who understand both HMRC processes and the realities of running a business can help prepare realistic repayment proposals and ensure directors do not commit to arrangements that the company cannot sustain. Without guidance, agreeing to a plan


that is unaffordable can quickly create more problems than it solves, leaving the business with very limited options if the plan fails. It is also worth noting that enforcement is not a final judgement – HMRC processes are procedural, and with the right plan, many businesses can continue to operate successfully while meeting their obligations.


5. Know there are always options Even when the situation feels overwhelming, most viable care homes have ways to manage temporary tax arrears. Time-to-Pay (TTP) arrangements are one of the most effective tools available. They are informal, confidential agreements with HMRC that allow repayments to be spread over a period that suits the business’ cashflow, rather than being forced into a rigid schedule.


Understanding which tax liabilities are HMRC


debt often builds up


not through


mismanagement, but timing


Seeking impartial guidance to set up a


TTP plan is a practical, responsible step, as it helps structure repayments in a way that protects staff, residents, and the ongoing operation of the care home. Trying to manage negotiations alone or taking out high-cost finance can be risky, particularly if personal guarantees are involved, as directors may personally expose themselves to significant liability.


most urgent can help directors prioritise payments and negotiate strategically, too. For example, PAYE and VAT often attract faster enforcement than Corporation Tax. Many directors are not HMRC experts,


nor is it realistic that they should be, but it is important they understand all available options and have a clear picture of the situation before making any decisions. The only stigma in these situations is


not taking action. Seeking help early is a responsible step, and many care home operators are facing the same pressures, so asking for guidance is normal and expected. TTP arrangements, invoice finance, or other temporary solutions can provide breathing space, allowing owners to focus on the care business itself while managing company- level obligations responsibly.


6. Don’t panic Financial pressure can feel overwhelming, but it is not a reflection on the director personally. It is key to recognise this distinction and to remember that the business and the company are two separate entities. The business is the day-to-day operation


providing care, while the company is the legal structure that houses it. When a company faces financial pressures, it does not mean the business itself is failing – a crucial distinction for directors to keep in mind. Most care homes experience HMRC


issues due to circumstances outside their control, such as delayed payments from local authorities, rising wages, or sudden policy changes. Without proper support, directors can find themselves in difficult situations through no fault of their own, especially if they lack impartial guidance to help manage the company’s obligations.


30 www.thecarehomeenvironment.com March 2026


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