The recession is over-what about HMRC’s ‘time to pay’ scheme?

Now we have 0.01% growth, and the recession is officially ‘over’, HM Revenue & Customs (HMRC) seems to be toughening its stance on payment and appears to be rejecting an increasingly large number of applications for the scheme.

Chancellor Alistair Darling stated that ‘Time-To-Pay’ will be there “for as long as is needed” but this is questioned by figures obtained by

accountancy firm Wilkins Kennedy – the money owed under the scheme has reduced from £1.15billion in April 2009 to £1.01billion at the end of November 2009.

It seems that arranging a ‘Time-To-Pay’ deal in the current climate is now more difficult than ever before.

Some key ‘Time-To-Pay’ statistics:

• To date c. 240,000 businesses have been able to reschedule their crown debt;
• 60 per cent of these arrangements are for three months or less;
• 1 per cent of arrangements are for 12 months or more;
• 8 per cent of businesses which have an arrangement under the scheme have failed to make ANY monthly payments.

Presenting a workable, robust and deliverable case to HMRC will greatly improve your chances of obtaining their support.

’Time-To-Pay’ developments:

• Following the Pre-Budget Report the ‘Time-To-Pay’ scheme has been extended to include partnerships;

• From 31 January 2010 all unincorporated businesses from sole traders to large partnerships will be required to make payment on account for their self-assessment tax;

• The VAT rate has returned to 17.5 per cent leading to a rise in payments due to the revenue;

• The 0.5 per cent rise in National Insurance (NI) contributions will further increase the crown liabilities burdening businesses;

• Where tax arrears exceed £1million there will be a requirement for an Independent Business Review (IBR) to be conducted to establish a company’s needs.

We are happy to assist in arranging time to pay agreements.