HMRC should toughen up Time to Pay checking

The rules for ordering special reviews of companies using the taxman’s Time
to Pay scheme should be toughened up so that more businesses face Independent
Business Reviews (IBRs), according to turnaround professionals.

Currently HM Revenue & Customs rules mean that a company seeking
additional time to defer tax of more than £1m should face a review. But
turnaround professionals believe that threshold should fall.

Christine Elliott, chief Executive of the Institute for Turnaround
Professionals, said: “The current levels don’t seem adequate if you consider
that only two IBRs have taken place in the last five months, surely this means
that businesses are simply managing their financial problems in an alternative
manner. But, in the long run, this will inevitably lead to further problems.

“When businesses become insolvent, the Crown and the taxpayer lose out, so
where they are avoidable, that is advantageous. It is in HMRC’s interest to be
flexible, within its parameters, with businesses that can be solvently
rehabilitated; or to cut losses with those that cannot.”

The institute reports that it is believed that just two reviews have been
undertaken since they were introduced in April of this year.

Read more:

Time
to Pay panel approved

Tougher
rules for Time to Pay