Can you benefit from the government’s new tax payment deferral scheme?

In the November pre-budget report Alistair Darling announced that the tax man would take a much softer line with businesses that were struggling to pay their tax and VAT etc.

HM Revenue and Customs said that this would enable firms owing more than 350 million pounds in tax to spread out their payments. Firms have suffered in recent months as the global financial crisis led banks to cut off credit lines, leaving thousands of firms with cash-flow problems.

This applies to these types of payments:

personal tax and CGT on personal tax returns (including amounts due on 31 January 2009)
corporation tax
VAT
Employees’ PAYE or NIC
Here are some other important facts about this scheme, sometimes referred to as the “business payment support service”:

No penalties or fines will be charged on the deferred tax once an agreement is reached with taxman
Interest will be charged, but interest rates are now relatively low, eg 3.5% for corporation tax.

Anecdotal evidence so far suggests that it is possible to agree deferral for a year or more in some cases. To use the scheme, you may have to prove that you will be able to pay the tax eventually and that you are genuinely unable to pay it at present.

The HMRC telephone number for making enquiries about this scheme is 0845 302 1435  or contact me on 0118 9235811 or susank@kandh.co.uk to find out more.