| HMRC refusing larger “Time to pay” VAT requests |
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14 June 2010 HMRC refusing larger “Time to pay” VAT requests HMRC is refusing requests for deferrals of larger VAT payments to its “Time to pay” scheme says Syscap, the UK’s leading independent finance provider. New figures obtained by Syscap under the Freedom of Information Act reveal that the average VAT request made to “Time to pay” that was agreed* is £18,840 whereas the average value of the VAT requests refused is £117,216 – more than six times larger. “Time to pay” was designed to allow viable businesses to defer tax payments during the recession. £5bn of tax payments have been deferred since its inception. Philip White, Chief Executive at Syscap comments: “These figures suggest that if you want to defer a tax payment of over £18,840 then you are really going to encounter problems.” “If HMRC was trying to reduce the amount of money advanced through “Time to pay”, surely the easiest way to do it is by refusing bigger applications?” “June is one of the busiest times of the year for VAT funding and we are getting requests from firms that are perfectly viable and the best credit risks available looking for help, because HMRC has refused their application.” “The new Government needs to be honest with UK businesses as to whether this is what they want to see happening – they have, so far, been relatively quiet on “Time to pay”. “HMRC’s status as the number one issuer of winding-up petitions is also ironic considering they are refusing so many VAT “Time to pay” applications.” HMRC recently introduced (April 6) a requirement for all “Time to pay” requests worth more than £1million to be supported by an “Independent Business Review” of that business. The review must be paid for by the business applying under “Time to pay” and HMRC have admitted the average cost of an IBR would be £42,000. Philip White says: “Parting with over £40,000 to conduct a review when you are applying for a deferral on tax payment almost makes approaching HMRC cost prohibitive. What’s worse is that some industry voices suspect that when all’s completed the actual cost of these reviews is going to be significantly higher than that.” “With the future of “Time to pay” still unclear and banks still not being forthcoming in providing cash flow capital to SMEs, businesses need to consider whether they should seek alternative funding arrangements.” * To March 28 2010 See coverage of this press release below: |
