HMRC tightens the screws on Time to Pay arrangements

Accountants might like to advise their clients that HMRC is refusing more Time to Pay arrangements according to figures released last week.

In the first quarter of this year, 3,390 TTP requests were refused compared to 2,360 in the corresponding quarter last year and 2,440 in the same period the year before.

The figures look more dramatic when you view them from the perspective of requests agreed. 32,900 TTP requests were granted in the three months beginning the first of January this year. 57,800 were agreed in the first quarter of 2010 and 82,000 were granted in the corresponding quarter of 2009.

A spokesperson for the Revenue said the scheme is still available to help firms address short-term difficulties with cash flow that mean they cannot settle their full business or income tax liabilities on time. It was also claimed that there had been no change in the criteria for arrangements.

However, insolvency practitioners claim HMRC is taking a tougher stance. Tony Murphy, from Bridge Business Recovery, says the Revenue is needlessly kicking some TTP requests into touch. Companies with secure guarantees are being turned down and even the requests that are granted are requiring payment to be made in full within three months.

Steven Law from Ensors, said companies that have already had a TTP are finding it increasingly difficult to get another one but HMRC still looks favourably at people applying for the first time.

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