Business News
HMRC takes hard line on Time to Pay applications
The number of companies being refused more time to pay tax bills has doubled, new figures have revealed.
Data obtained under the Freedom of Information (FOI) Act shows that officials at HM Revenue & Customs (HMRC) are taking an increasingly hard line on businesses requesting ‘time to pay’ their taxes.
HMRC’s Time to Pay scheme is designed to enable viable businesses to defer tax bill payments during the recession if they are experiencing cashflow difficulties.
However, the FOI figures reveal that more than 11 per cent of applications were rejected by HMRC during the first quarter of the year, compared to just 5.3 per cent for the same period in 2009.
Struggling businesses are increasingly having to take bank loans to pay HMRC VAT, although experts have warned that SMEs are still finding it difficult to do this, meaning they are more likely to be hit by HMRC’s increase in Time to Pay rejections.
Analysts have also argued that it is too early in the economic recovery for HMRC to start withdrawing help for businesses struggling as a result of the recession.
