The Budget also brought an announcement of an improvement to the Business Payment Support Scheme (BPSS).

The Scheme will remain in place for the foreseeable future, and those needing more time to pay their business tax liabilities will now be able to bring additional information into the negotiations. Strictly, credit cannot be taken for trading losses until they have been “determined”. This means that losses do not count for relief until the accounting period which produces the loss has come to an end.

However, the new development allows businesses which are currently in a loss making period to disclose the anticipated loss when negotiating time to pay. This will, in practical terms (although not in legal terms) give relief for the loss when it is anticipated. The time to pay arrangement having been agreed, the loss will be formally claimed for once the accounting period ends.

This is particularly useful given the extension to loss relief carry back given in the Budget, as claims might be available against income of the three preceding years. Those advising on this particular issue should note, however, that interest will still run on such carry back claims, as the previous tax liability continues to carry interest for both income and corporation tax. In corporation tax, only interest in relation to the immediately preceding period is cancelled by a loss carry back claim, and in income tax the previous tax liabilities are unaltered – the claim gives rise to a tax credit on the date of the claim. However, obtaining time to pay will prevent the income tax liabilities incurring a surcharge.

More information? See Business Payment Support Service - Further extending our help to businesses [1]