HM Revenue and Customs
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New rules for businesses requesting ‘time to pay’ on large debts
New rules for businesses who want to reschedule large tax debts under HMRC’s Business Payment Support Service (BPSS) come into effect next month.
The BPSS gives viable businesses, experiencing temporary difficulties paying their taxes,the opportunity to reschedule their tax payments to a more affordable timetable, as part of a ‘time to pay’ arrangement. These arrangements can cover PAYE, National Insurance, VAT or any other HMRC taxes.
From April 2010, businesses seeking time to pay arrangements on tax debts of £1m or more must provide an Independent Business Review (IBR) in support of their request. Typically, an IBR will include a review of a number of important areas, including: current trading and financial position; profit and cash flow projections; business and financial strategies; management systems; and funding and banking arrangements.
The IBR must be carried out by a qualified professional advisor – such as an accountancy firm or an insolvency practitioner – and be paid for by the business making the request. In many cases, businesses will have already implemented a similar review, for example, in discussions with their banks.
HMRC’s Nick Lodge said:
“In view of the amounts of tax involved, HMRC needs to ensure that decisions about large time to pay arrangements are supported by a comprehensive audit trail, to help guarantee better value for money and fairness for all taxpayers.
“We remain committed to supporting compliant, viable businesses through periods of temporary difficulty by providing time to pay arrangements under the BPSS.”
For further information on BPSS, go to www.hmrc.gov.uk/pbr2008/business-payment.htm or contact the BPSS helpline on 0845 302 1435. The helpline is open from 8am to 8pm, Monday to Friday, and 8am to 4pm at weekends.
Notes to editors
1. The BPSS was created in November 2008 to provide viable businesses in temporary financial difficulties with a streamlined, cost-free service for considering requests to pay their taxes to an affordable timetable. It has helped over 200,000 businesses reschedule more than £5.2billion of tax.
2. The Chancellor announced the decision to require Independent Business Reviews for time to pay requests involving sums of £1m or more in his Pre Budget Report on 9 December 2009.
Issued by HM Revenue & Customs Press Office
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