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Contractor accountants support tax deferral assistance

Contractor accountants support tax deferral assistance

The FSB is amongst groups lobbying parliament not to end the current tax deferral scheme. It is feared that closure of the scheme might lead to thousands of SMEs, including limited company contractors, filing for bankruptcy.

The time-to-pay scheme has been an enormous help to small businesses and online accountants during the economic downturn and 66% of business owners would like to see it either retained or increased.

Recently there has been an increase in complaints against HMRC who seem to have become reluctant to let SMEs take advantage of the scheme. The revenue doubled the number of applications that were rejected in the first quarter of 2010 to 11%. In 2009 the figure was just 5.3%.

Although HMRC insists it has not taken a harder stance, and that every request is considered on its own merits, business representatives are concerned.

200,000 businesses still say they need time-to-pay and up to 20,000 of these may fold if the scheme is withdrawn.

One of the partners at MCR Tax Arrears Solutions has warned that we are likely to see a rise in insolvencies as HMRC is already owed £30 billion from businesses who have taken advantage of the scheme.

Since the scheme was implemented, 310,000 time-to-pay requests have been granted. The total amount deferred is nearly £5.3bn.

HMRC recently said that any company that wished to defer more than a million pounds would be required to submit an independent business review.

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Image: Lack of support keeps dragging by assbach

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