Statistics show that HMRC 'Time to Pay' scheme being wound down
A leading accountancy firm says that the amount of assistance being provided by the Time to Pay Scheme (Business Payment Support Scheme) is being wound down - according to HMRC's own figures.
Wilkins Kennedy, the Top 25 accountancy firm says that the money owed by businesses under the Time to Pay scheme has shrunk from £1.15 billion in April to just £1.01 billion at the end of November, contradicting claims made by the Chancellor in the Pre Budget Report that HMRC will continue to offer the scheme to businesses for as long as they need it.
The firm says that with the economy and lending by banks to businesses still shrinking it seems highly unlikely that the scaling back of the Time to Pay scheme is due to a lack of demand from businesses.
Anthony Cork, Director at Wilkins Kennedy, comments: “All the signs indicate that Time to Pay is being wound down. However, HMRC seems to be overlooking the fact that historically, businesses have needed as much support, if not more, as the economy goes into recovery. This recession is unlikely to be any different.”
“Many businesses have seen their finances drain away through the course of the downturn and it would be unrealistic for HMRC to expect them to get back on their feet just because the economy as a whole is showing the initial signs of a return to growth.”
60% of businesses given just three months or less to cover their tax bills
According to information obtained from HMRC by Wilkins Kennedy under the Freedom of Information Act 60% of Time to Pay arrangements agreed with HMRC allow businesses to defer their tax payments for three months or less. 79% are for six months or less.
Anthony Cork says: “With the economy still shrinking in the Third Quarter of this year Time to Pay facilities of less than three months may seem more like a stay of execution than a lifeboat.”
“If a business is truly struggling and unable to secure funding from anyone other than HMRC then it is unlikely to see a meaningful improvement in its fortunes in just three months. However, HMRC is agreeing to allow less than 1% of businesses to defer their tax payments for a year or more and is failing to take into account the seriousness of the situation and the seasonality of many businesses.”
You can find out more about the Business Payment Support Service here.
Posted December 18, 2009
- Great DELL Offers for Startup Businesses
- FreeAgent Online Accounting - FREE trial and 10% off for Bytestart readers.
- Home Business Insurance - Save money with Direct Line for Business. We guarantee to beat any quote for the same cover. Immediate quote available.
