Firms allowed to delay Tax Payments
HM Revenue & Customs (HMRC) has launched a business payment support service which allows struggling firms to defer their business tax bills.
SMEs finding it difficult to pay income tax, VAT, corporation tax and National Insurance contributions can get in contact with HMRC to arrange an affordable payment timetable, allowing them to make payments over a longer period.
Where a deferment has been made, HMRC will not apply any late payment surcharges, although interest will be charged on outstanding amounts.
Because HMRC rates of interest are generally lower than rates offered by many high–street banks, tax experts are predicting that there will be a rush to defer payment from firms suffering cashflow problems. According to HMRC, £3 billion in tax could be deferred over the next year.
Interest will be charged at 5.5% on outstanding National Insurance, income tax, capital gains tax and stamp duty and at 4.25% on corporation tax. The Association of Chartered Certified Accountants’ head of taxation Chas Roy–Chowdhury said:
“The rates are very attractive and generally much lower than you would get from a typical lender. Many small businesses are worried about cashflow at the moment and one way to allay those concerns is to allow them to defer tax.”
“Even though the period of deferment has not yet been confirmed, there’s no doubt that this is a helpful step. It creates a more level playing field for small firms, many of whom are experiencing financial pressure right now.” he added.
HMRC chief executive Lesley Strathie said that businesses wishing to defer payments would receive a ‘sympathetic’ response.
“We are committed to supporting businesses experiencing temporary difficulties and understand that some businesses want to talk to us about the amount of time they need to pay their taxes,”.
“Our new Business Payment Support Service will make this easier and faster. Callers will get through to an HMRC officer who will listen and provide a solution tailored to specific circumstances.”
The Business Payment Support Line is open Monday to Friday 8.00am to 8.00pm, Saturday and Sunday 8.00 am to 4.00 pm.
For more information about the Business Payment Support Service, visit the HMRC website or call 0845 302 1435
Alternatively read our article on Tax and National Insurance for more information.