How tough will the new govt be on Tax Deferrers?
One wonders how the new coalition government, focused as it is on improving the public finances as quickly as possible, will view the ongoing Business Payment Support Service, which allows businesses more time to pay their tax bills to the HMRC. Despite all the build up to the election in april, i did happen to notice that HMRC introduced the idea that if a company wanted to defer more than 1 million pounds of tax, they would have to pay for an Independent business Review (IBR) so that the HMRC could better monitor and assess businesses before they went bust.. i.e. they want to avoid large unpaid tax bill write offs.
Many of course believe that the insolvency figures over the last 12 months have been artificially low thanks to the government’s tax deferral scheme, which has kept businesses afloat when in any other recession, they would have drowned. If the HMRC starts to get tougher under the new coalition regime, how many of these businesses will be able to pay up? When you think about it, if a business says it can’t pay its tax on time, it can’t have the money to set aside for when it is asked to pay the bill at a later date- unless of course its one of the lucky ones that have seen a healthy improvement in their daily affairs in recent months. Sadly, I fear, a great many businesses are creeping slowly out of the recession, and it may be some time before they will be in a fit financial state to pay back the HMRC. But will they ever get the chance before an HMRC winding up Petition hits the desk?