Businesses struggling to keep up with Time to Pay tax debt
Turnaround Management Association director Tyrone Courtman says businesses are finding HMRC's Time to Pay tax deferral scheme hard to keep up with
Companies in Time to Pay (TTP) arrangements are finding it difficult to stick
to them and obtain credit according to the Turnaround Management Association
(TMA).
TMA director and head of business recovery at Cooper Parry, Tyrone Courtman,
believes many of the 300,000 businesses who benefitted from HMRC’s deferred tax
scheme were “finding it difficult to adhere to”.
Courtman warned growth remained “critically” weak in the private sector due
to a shortage of credit – forcing businesses to seek insolvency processes as an
alternative.
“Many businesses are seeing their recovery plans thwarted with threats of
bankruptcy and are having to resort to Company Voluntary Arrangements [an
insolvency process] just as they are pulling through, because as increased
activity places demands for increased working capital, they have neither the
reserves nor their funders the appetite to finance it,” he said.
Courtman warned chancellor George Osborne that while enacting Britain’s
controlling inflation and making public sector cuts, he still needed to find a
balance between spending reduction and the recovery of the private sector.
“If the private sector is to deliver the two million new jobs the economy
needs then the chancellor needs to proceed with extreme caution. Cuts of 40% in
departmental budgets would have a severe knock-on effect on the private sector,
and the Treasury needs to be extremely conscious of the risk of throwing the
baby out with the bathwater,” he said.
Further reading:
Tax
denting UK’s top city status: CBI/KPMG survey
Budget
2010: Warning as Time to Pay scheme is extended
HMRC
rejects 6000 time-to-pay pleas