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December 2010
Concern As Time To Pay Arrangements Fall
New figures show that fewer businesses are deferring tax payments through the HM Revenue & Customs’ (HMRC) Time to Pay scheme, designed to help businesses during the economic downturn.
Figures highlighted by UK independent finance provider Syscap show that the value of Time to Pay arrangements granted by HMRC fell by 45 per cent over the last year from £830 million in Q3 2009 to just £460 million in Q3 2010. In the last quarter alone, arrangements fell 16 per cent from £550 million in Q2 2010.
R3, the Association of Business Recovery Professionals, said that the decline in the number and value of Time to Pay arrangements during 2010 reflected more favourable conditions for businesses post-recession and that the scheme had worked well in preventing the spike in corporate insolvency numbers that typically follows the end of a recession.
But it said that R3 research looking at the challenges facing businesses in 2011 found that almost a third (29 per cent) of insolvency experts thought that a squeeze on Time to Pay would be the most harmful potential development. The impact of public sector cutbacks and a modest rise in interest rates were joint second, with 23 percent each.
R3 President Steven Law said: “Our members have seen how invaluable the Time to Pay scheme has been to businesses. We believe that it is important that it remains available as a breathing space for viable businesses, but that it is not used as an alternative credit facility for ‘zombie companies’.”
R3 describes “zombie companies” as those that are able to service debt but not fund expansion.
LINK: Time to Pay (Business Payment Support Service)
LINK: R3 press release
