HMRC business support from Baxter Ramsay - Advice on the MRC Business Support Payment Service

Latest News

•••••••••••••••••

Time to Pay?

Over a year on from the introduction HMRC Business Support Payment Service hotline, it has been reported, that more than 200,000 “time to pay” arrangements amounting to nearly £4 billion, have been finalised.

HMRC claim that around 60% of the arrangements are for periods of three months or less and at the start of October 2009, around £2.7 billion had been paid leaving £1.1 billion outstanding. HMRC would appear to be changing as in the following ways:-

Initially, a large percentage of businesses entered into a six or twelve month HMRC repayment plan (many with a final bullet payment). It is now far harder to agree a plan for more than a six month period.

HMRC are scrutinising directors who agreed an extended repayment schedule and then failed to comply. Renegotiation is very difficult.

Proposals to HMRC are subject to far greater scrutiny. Where the outstanding liability is more than £100,000, HMRC are employing specialist teams to review proposals and are challenging directors’ cashflow forecasts. Many directors do not devise a contingency plan should the HMRC decision be negative or require increased monthly payments. Should HMRC reject a director’s proposal, there appears to be significantly less tolerance, with debt collection being immediately instructed or winding up petitions being issued.

Summary

Many businesses survived last year by entering into an HMRC “time to pay” arrangement. With the recent announcement that there will be an extension to the “time to pay” scheme, some insolvencies may be avoided at the moment and subsequent unemployment delayed in the early part of 2010.

We believe that many sound and distressed companies in the scheme may struggle to find the liquidity when they have to eventually repay the HMRC debt. It is now extremely important that bank customers liaise with their relationship managers to ensure that the bank is not faced with unexpected and unpalatable requests to rescue an HMRC liability position.

For further information simply fill in our online enquiry form or email:enquiries@baxterramsay.co.uk