HMRC TIME TO PAY ARRANGEMENTS

Some companies are finding that the HM Revenue and Customs, just like the banking sector, are restricting assistance given during times of cash flow problems. Previously they may have been able to turn to “Time to Pay” (TTP) arrangements, but there has been a marked increased in the number of TTP applications being rejected by HMRC.

Figures released this month show that 3,390 TTP requests were refused in the first three months of 2011, compared to 2,440 in the same period in 2009 and 2,360 in 2010. The number of requests agreed has dropped dramatically, with 32,900 agreed in the first quarter of this year, 82,000 in 2009 and 57,800 in 2010.

However, HMRC seem to be in denial. They say the scheme “continues to be available to help companies address short-term cash flow difficulties that result in an inability to pay their tax in full and on time”. It added that the criteria for arrangements had not changed in any way.

Our experience tells a different story. We believe the Revenue is taking a much harder line, unnecessarily rejecting many requests or restricting payments to a three month period. Previously, a far more pragmatic stance was taken, with a six month or twelve month period being the norm. Even longer terms were not unheard of, depending on circumstances.

It seems that if a company has previously had a request granted, they will find it far more difficult to request a new TTP arrangement and, although first time arrangements are continuing to be granted, this is most certainly not as easy as it used to be. Many requests are being restricted to those taxpayers who have exhausted their banking and credit card facilities.