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Can contractor accountants still recommend Time To Pay?

Can contractor accountants still recommend Time To Pay?

HMRC is making a lot less Time to Pay arrangements with businesses looking to defer tax payments than it did when the scheme was first introduced.

This could affect contractor accountants assisting clients through a bad patch, and raises the question of whether it’s worth suggesting it at all.

Figures recently released by the Revenue show that 196,200 TTP arrangements were made in the first nine months of 2009, whilst only 114,600 were agreed in the same period this year. That’s a drop of 81,600 or nearly 42%. In the first 9 months of this year, arrangements worth £1.9bn were approved, compared to the £3.4bn approved between January and September 2009.

The Revenue has doubled the amount of requests it refuses, now declining 5.2% of TTP arrangements compared to the 2.6% it refused in the corresponding period last year. In the last 2 years, 13,900 requests for Time to Pay, totalling £810 million, have been refused.

Philip White, the chief executive of Syscap, says this is clear proof that the Revenue is toughening up over deferrals of business taxation. He thinks this could possibly be the start of the TTP scheme winding up.

Figures have not been released to show the number of companies requesting repeat deferrals but the vice president of R3, Frances Coulson, said there was a considerable increase between September 2009 and early 2010. And around 67% of insolvency practitioners saw some companies with TTPs fall into insolvency at the end of last year. Insolvency practitioners are predicting that corporate insolvencies will increase next year.

Since the start of the scheme in November 2008, 371,200 Time To Pay arrangements have been made allowing businesses to defer £6.38 billion worth of tax payments.

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Image: Who Am I Sam by ?napshot 19

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