North firms put off £100m tax bill
Sep 30 2009 by Peter McCusker, The Journal
TAX payments of more than £100m have been deferred by North East companies in the 10 months since the Government launched a scheme to help UK business through the recession.
More than 10% of all North East businesses, 6,310, have deferred tax payments with companies in the construction sector accounting for over a quarter of those who have taken advantage of the arrangements. Other sectors where the take-up has been high include manufacturing and retailing.
Ross Smith, head of policy at the North East Chamber of Commerce, said: “The tax deferment scheme has helped businesses with good long- term futures.”
A total of £102m has been deferred in the region with County Durham firms accounting for £20m of this and the second highest North East area being Newcastle with £15m of payments put back.
Her Majesty’s Customs and Revenue said the Business Payment Support Service (BPSS) was there to help businesses needing more time to pay their tax bills.
A spokesman added: “The BPSS is open to all businesses in temporary financial difficulties and can be used to spread tax due now over a period which reflects the business’s circumstances.
“The majority of businesses have agreed repayment timetables over three to six months, but HMRC will be able to revise or extend the time-to-pay arrangements, depending on individual circumstances.”
Nationally more than £3.6bn has been deferred and the Treasury said the arrangements had benefited more than 100,000 businesses.
Accountants say time to pay has provided a timely boost to businesses struggling to manage their cashflow.
George Hardy, tax manager at Hartlepool-based Horwath Clark Whitehill, said: “It’s a good scheme in the short-term as it does set out a managed plan by which companies can pay their bills.
“But it is only a short-term fix. The Revenue will expect companies to make provisions for paying the money back.”
The Business Payment Support Service was announced by the Chancellor in November’s Pre-Budget Report and provides a fast-track service that offers support to businesses needing more time to pay their tax bills. Businesses can agree terms they can afford with HMRC over the phone.
