Carillion: HMRC recommends time to pay agreements for stricken firms

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HMRC has offered support to businesses owed money by collapsed construction giant Carillion that may be worried about their ability to meet their tax liabilities.

The tax authority said that it “understands” that many businesses contracted to Carillion will be concerned about their tax affairs, and stated that affected firms can put in place instalment arrangements if they are unable to settle their tax affairs on time following the failure of Carillion last week.

“We know that this is a troubling time for Carillion’s workers and businesses that were in Carillion’s supply chain,” the government said in a statement. “As part of its ongoing commitment to delivering support for businesses, HMRC will provide practical advice and guidance to those affected through its Business Payment Support Service (BPSS).”

The BPSS connects businesses with HMRC staff, who are authorised to offer advice on tax issues, address immediate concerns and agree on ways forward for those affected.

The BPSS can:

  • Agree instalment arrangements if a business is unable to pay tax on time following the Carillion collapse.
  • Suspend any debt collection proceedings.
  • Review penalties for missing statutory deadlines.
  • Reduce any payments on account.
  • Agree to defer payments due to short-term cash flow difficulties.

The business payment support service is available seven days a week between 8am and 8pm on weekdays and until 4pm at the weekend on 0300 200 3835.

HMRC can also provide workers and their families with cash support through the tax credits system – more details are available here.

Working with banks to help small businesses

Business secretary Greg Clark also met with banks last week to seek assurances that they will support small businesses affected by Carillion’s liquidation.

A government statement claimed lenders are contacting customers and are putting in place emergency measures, including overdraft extensions, payment holidays and fee waivers to ensure those facing short-term issues can be helped to stay on track.

Clark stated banks had agreed to provide "tailored support" worth almost £250m to those hit by Carillion’s failure.

However, this has been dismissed by the Federation of Small Businesses as a “sticking plaster solution”, that will only help those currently viable to continue in business.

“We all need to understand that it is very unlikely - as in any administration or liquidation - that those who have already invoiced Carillion up to the announcement on Monday are going to get anything out of this at all”, FSB chairman Mike Cherry told Radio 4’s Today Programme.

About Tom Herbert

Tom is editor at AccountingWEB, responsible for all editorial content on the site. If you have any comments or suggestions for us get in touch.

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