Do You Owe The Taxman Money?

In the current hard economic times, many businesses are struggling to settle arrears of all forms of Tax with HMRC. However, all is not lost as HMRC recently introduced their “Time to Pay Scheme” (TTPs), which allows small to medium sized businesses (SME’s) to spread tax liabilities over a period of time.

Whilst each application under the scheme is looked at on case by case basis, there are a number of basic conditions that HMRC has to be satisfied about:-

1. The SME or individual, genuinely cannot pay their liability on the actual due date
2. The SME or individual has offered the best payment proposals that they can realistically afford
3. The arrears of Tax can be settled within 12 months; however, TTPs lasting over a year may be agreed, but only in exceptional cases.
4. That the business has the ability to pay any other Tax that arises during the TTP period

Anecdotally, it would appear that HMRC are increasingly playing hard-ball on granting TTPs and appear reluctant to recognise that flexibility is needed, especially when a business’s cashflow varies over the year. HMRC are required to treat each taxpayer fairly and to apply the same criteria nationwide, however because of significant regional differences in the interpretation of the TTP Scheme by different Tax Offices, the Federation of Small Businesses has arranged a meeting with HMRC in late September 2012 to discuss and hopefully improve the scheme and are asking for feedback, good or bad.

If you are worried about a tax investigation or would like to contact us we would be delighted to hear from you