Taxman gets tough with NW businesses

By August 24, 2011Finance, News

A continued fall in the number of North West businesses allowed to defer tax payments shows that HMRC is now taking a tougher line with late payers, says insolvency trade body R3.

 

Figures from HMRC show that in the six months to the end of July, 5,460 businesses in the region were allowed to defer tax to the value of £95 million under the Time to Pay scheme. Since the scheme started in November 2008, a total of 48,800 Time to Pay agreements have been made in the North West with a total value of £780 million. However the number and value of arrangements has been falling since 2009.

 

Jeremy Oddie, North West regional chair of R3 and head of recoveries at Mitchell Charlesworth, explains: “The Time to Pay scheme has in many cases provided a valuable breathing space for struggling companies, though it has also been responsible for keeping a lot of zombie businesses artificially alive.

 

“The continued decline in the number and value of arrangements shows that the taxman is now taking a much tougher stance. This is backed up by the recent sharp rise in company liquidations, which indicates that HMRC is now stepping in to wind up companies that have been given time to pay and still not done so, or late payers without agreements in place.

 

“Companies with cashflow problems should be aware they can no longer rely on deferring their tax bill as a survival strategy, but must seek professional advice to get their house in order.”

 

HMRC has announced that these latest Time to Pay figures are the last ones that will be released. Jeremy Oddie adds: “We are concerned that HMRC will no longer publish these figures, as we believe it is in the public interest to do so.”

 

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