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22 January 2009

By mid-January HM Revenue & Customs (HMRC) have helped over 20,000 businesses delay paying more than £350 million of tax. This has been achieved by businesses contacting HMRC's Business Payment Support Service (BPSS), which was introduced in the Pre Budget Report in November 2008.

The new service was primarily set up to help businesses, but all taxpayers can use it. It gives taxpayers the opportunity to pay all their HMRC taxes, including; individual self-assessment, corporation tax, PAYE, National insurance Contributions and VAT through payment timetables which they can afford.

If you or your business is facing financial difficulty in these challenging economic times you too could benefit from the new service by calling the BPSS on 0845 302 1435.

For individuals, if an agreement is reached before 28 February 2009, in respect of a liability due on 31 January 2009, HMRC have agreed that the normal 5% surcharge penalty will not be charged.

Previously HMRC required evidence of the taxpayers’ inability to pay and proof that they had exhausted all other sources of finance, however the new BPSS only requires a reason for the request. HMRC will generally provide a decision over the phone within 10 minutes, but even where a case needs to be referred to the local recovery office (where a liability is over £100,000 or is overdue) a decision will usually be made within four days.

Interest is still charged on any underpayment as normal until the liability is paid.

Examples

Hazlewoods have found the BPSS very helpful and willing to help taxpayers manage their tax liabilities, as the following examples demonstrate.

Example 1

With one quick phone call HMRC agreed that a company with a corporation tax liability due on 1 February 2009 of over £50,000 could be spread over 12 months.

Example 2

Following a referral to the local recovery office HMRC agreed that a company with a corporation tax liability due on 1 October 2008 of over £245,000 could be spread over 12 months. This is even though the liability was already overdue before the initial phone call to the BPSS was made.

What should you do?

If you are likely to have insufficient funds to be able to meet imminent tax liabilities, either phone your usual Hazlewoods contact or call HMRC direct on 0845 302 1435 to see if you can agree time to pay.

Notes:

  • The BPSS can be contacted on 0845 302 1435 from 8am to 8pm Monday to Friday and from 8 am to 4pm at weekends. 
  • Further information is available at: http://www.hmrc.gov.uk/pbr2008/business-payment.htm
  • One condition of any agreement will be that all payments are made on time, therefore we would suggest that a direct debit is setup to cover any payments agreed.

For more information on the above, or other tax issues, please contact your usual Hazlewoods tax contact or e-mail tax@hazlewoods.co.uk