HMRC accused of hypocrisy over small business payments

Federation of Small Businesses criticises HMRC for tardiness in paying out small business incentives, pointing out that the taxman would not itself tolerate late payments

Written by Kevin Reed

Accountancy Age, 31 Aug 2007

The Federation of Small Businesses has urged the taxman to pay incentive payments owed to 130,000 small businesses for filing annual PAYE returns online.

HM Revenue & Customs has admitted that it could take until December to pay the all the businesses, owed £150, for filing PAYE returns online, prompting the FSB to ask HMRC not to delay when meeting incentive obligations.

'It is a very different scenario when the HMRC are owed money from small businesses – there is little room for a small business owner to tell the taxman, "actually, it will take about four months to pay you because we’ve just been too busy",' said Bill Knox, FSB national taxation chairman.

'The financial incentive may not be a substantial amount to larger businesses but is vital to smaller ones, and waiting over a quarter of a year for it is too long a time.

'The government quite rightly disapproves of late payment of both tax demands and monies between businesses. HMRC, as an arm of the government, should set an example and pay within 30 days.'

The incentive scheme was introduced in 2004/05 to encourage business with fewer than 50 employees to file PAYE online, which is compulsory from 2010. HMRC has previously been criticised by the profession for taking too long to make these payments to businesses.