HMRC takes on role of bank, accountants advise

Accountants are advising small businesses finding it difficult to pay their January tax bills to seize the opportunity of the Chancellor's promise to give them 'as long as they need' to pay up, because of the low rates of interest being charged by HM Revenue & Customs.

According to Government sources, HMRC's new Business Payment Support Service may defer as much as £3bn in tax over the next year, The Daily Telegraph reports.

'I think accountants will tell their clients where the best deal is. The rates are pretty attractive for what small businesses can get. They are ethically bound to offer all options to clients and this is a highly attractive option,' Chas Roy-Chowdhury, Association of Certified Chartered Accountants, head of taxation, said.

John Whiting, PriceWaterhouseCoopers tax partner, said: 'They are setting up a service that may well like to say "yes". It's not a full service bank, as it were, but it does have overtones of banking. It's all about rescheduling money you owe rather than borrowing more money.'

Further reading:

PBR 08: Tax deferral to spread across 3 years

Read The Daily Telegraph story