A FALL in the number of Yorkshire businesses allowed to defer tax payments shows that the tax man is taking a tougher line with late payers, says insolvency trade group R3.
Figures from HM Revenue & Customs showed that 3,660 businesses in the region were allowed to defer tax to the tune of £61m under the Time to Pay scheme in the six months to the end of July.
Since the scheme started in November, 2008, a total of 33,400 Time to Pay agreements have been made in Yorkshire and the Humber with a total value of £550m. However, the number and value of arrangements has been falling since 2009.
Andrew Walker (pictured), chairman of R3 in Yorkshire, said: “The Time to Pay scheme has in many cases provided a valuable breathing space for struggling companies. However, it has also been responsible for keeping a lot of ‘zombie’ businesses artificially alive.
“The continued decline in the number and value of arrangements shows that the taxman is now taking a much tougher stance.
“This is backed up by the recent sharp rise in company liquidations, which indicates that HMRC is now stepping in to wind-up companies that have been given time to pay and still not done so or late payers without agreements in place.
“Companies with cash flow problems should be aware that they can no longer rely on deferring their tax bill as a survival strategy, but must seek professional advice to get their house in order.”
HMRC has announced that these latest Time to Pay figures are the last ones that will be released.
Said Mr Walker: “We are concerned that going forward HMRC will no longer publish these figures as we believe it is in the public interest to do so.”
