Taxman takes tougher line on VAT payments

Gr�inne Gilmore, Economics Correspondent & ,}

The taxman incited down requests from struggling businesses to hold off VAT payments of some-more than 42 million in the initial entertain of this year.

The figure represents 11.2 per cent of the sum volume businesses asked to check profitable some-more than stand in the commission refused in the same duration last year. In the initial 3 months of last year HM Revenue & Customs incited down usually 5 per cent of requests 44 million of the 824 million requested.

The avowal has lifted fears that HMRC is removing tougher on businesses struggling to compensate taxation bills at a time when they are anticipating it formidable to benefit bank credit.

Under the Business Payment Support Service, set up dual years ago, companies can ask additional time to compensate house tax, VAT and inhabitant insurance.

Philip White, arch senior manager of Syscap, the IT financial provider that performed the interpretation from a Freedom of Information request, pronounced that small and medium-sized businesses were anticipating it tough to steal money, so headlines that the HMRC warding off rate has shot up is worrying.

Bank of England interpretation out last week showed that the sign of bank lending to businesses strike a jot down low in March.

Businesses are probable to compensate VAT from the date they contention their invoices, that can leave them in difficulties if the patron is late in profitable or goes under. Mr White said: Figures display GDP expansion of 0.2 per cent show the economy is weak. More needs to be finished to help, not less.

The VAT interpretation comes a month after HMRC introduced manners underneath that all companies requesting to check payments of some-more than 1 million underneath Time to Pay contingency bear an eccentric commercial operation examination by an authorized accountant, that could cost a commercial operation tens of thousands of pounds.

About 200,000 businesses have paid in instalments some-more than 5 billion in taxation payments given the intrigue started.

HMRC pronounced that it had not tightened the eligibility criteria for Time to Pay arrangements, adding that each ask was deliberate on the own merits.