HMRC imposes tougher rules on Time To Pay

The taxman has said companies must pay for detailed business reviews to be
drawn up if they are looking to defer a tax bill of more than £1m.

From 6 April, HMRevenue &Customs wants large companies to shoulder the
financial burden of the Independent Business Reviews if they want to secure a

The taxman hopes the move will also put off applications from those
businesses without a genuine need for the TTP.

The reviews could cost up to £75,000 for the most complex cases. HMRC wants
to shift the onus onto companies in order to lighten the heavy workload it faces
in processing Time -To Pay requests.

As of last week HMRC estimated 250 businesses a year would need to draw up an

“For large cases, this requires significant amounts of work by HMRC’s limited
operational accountancy resource,” the taxman has said.

The taxman has said there had been an increase in the number of large time to
pay requests, defined as £1m or more, during the last 12 months.

HMRC says the IBRs will ensure that the necessary review of both the
businesses ability to pay and longer term viability is “conducted quickly but in
sufficient detail to minimise the risk of decisions being made either to grant
or withhold TTP inappropriately.”

In what represents a hardening of its stance the taxman appears reluctant to
give businesses using the TTP an unfair boost compared to those companies who
have gone cap in hand to their banks for loans to meet their tax bills.

“In view of the amounts of tax involved and the risks to both businesses and
the Exchequer, HMRC needs to ensure that decisions are given quickly, with a
robust audit trail, in such a way that prevents advantage to those who seek
government support over those who obtain commercial finance to meet their tax
obligations by the due date.”

Further reading:

time-to-pay scheme tops £5bn

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