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HMRC takes hard line on Time To Pay

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4th Feb 2011
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Businesses looking to defer paying their tax bills are feeling the squeeze with many finding it increasingly difficult to secure Time To Pay arrangements under the Business Payment Support Scheme (BPSS).

AccountingWEB.co.uk members and business groups provided evidence this week of a harder line approach, in spite of HMRC denying there was a change in policy.

According to the latest HMRC figures, the percentage of all VAT, PAYE and Corporation Tax deferral applications turned down doubled in the last year - up from 2.7% to 5.8% - rising from 6,760 to 8,550 cases.

While 138,700 new arrangements worth £2.34bn were granted in 2010, HMRC claimed there had been a 60% decline in demand for the scheme in December compared with its March 2009 peak.

The Federation of Small Businesses (FSB) this week singled out TTP as one of the most effective and popular government schemes. Since the BPSS was launched in November 2008, some 395,400 tax bills have been deferred, worth £6.83bn.

The FSB told the The Telegraph that some businesses have been informed that the scheme is now is coming to an end. The big concern is what will happen to firms that have relied on the support if HMRC does withdraw the scheme.

Carl Bowles, a director at CBW, said Time to Pay arrangements had been a “lifeline” that had seen many companies through cashflow crises. However, he added, “There are a significant number of marginal companies who are not, in fact, viable going concerns. These firms, aka ‘Zombie companies’ have relied upon this support to continue to trade. It is inevitable that when this support is withdrawn these zombies will be laid to rest.”

Perhaps one of the most frustrating issues is the lack of consistency in the deferral process, as one AccountingWEB.co.uk member points out: “It all depends on who picks up the phone. I've had a couple of clients who have been reduced nearly to tears by the attitude of the person they talked to, others who have called up and sorted everything out in a few seconds with no problem at all...Totally shambolic but this is the HMRC of the future I'm afraid.”

Jamie Crampton, owner of Accounting 4 Fitness, added a different take on the matter: “In my experience those clients who knew well in advance that they needed time to pay and contacted HMRC to arrange their own "deal" have all got (pretty much) what they needed. Those who left it until the "last minute" were much more hit and miss - some did, some didn't.”

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By kpmillward
07th Feb 2011 10:53

Time to Pay

I am surprised Jamie Crampton's clients, who knew well in advance that they needed time to pay, where granted time to pay - our experience has shown that if you know well in advance and try to contact the Revenue to agree a time to pay arrangement you are simply refused because it is too early.

I agree though; it does simply depend on who you speak to - it is a bit of a time to pay lottery!

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By DavidMaidstone
07th Feb 2011 12:08

Time to Pay

Certainly the whole principle of Time to Pay is that you should find yourself unable to pay at the moment, so I have found that late application works better.  Also you need to be making a reasonable proposal and I suspect that some of the refusals would be refused by most of us reading this article.

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By ksagroup
08th Feb 2011 12:43

Time to Pay Deals

The HMRC is taking a tougher line on Time to Pay Deals.  It is paramount that the request is made in writing ( many don't do this ).  We have a simple time to pay programme that can help.  For accountants and Bookkeepers we will be launching this as a free service soon. To register please send me an email.

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