HMRC: £650m overdue under time to pay “is collectable”

HMRC was responding to figures which revealed the taxman was owed £970m by businesses under time to pay, and that £650m of this was overdue, while £320 is due for payment within an agreed deadline.

It was claimed that some businesses have deferred payment of their tax debts as many as four times under the scheme.

The latest figures emerged after a parliamentary question was put to HMRC from Lord Newby, co-chair of the Liberal Democrat Treasury parliamentary policy committee. Lord Newby asked how much money remains outstanding under the business payments support service, under which the time to pay operates.

Lord Newby was told that 395,400 time to pay arrangements have been made, involving £6.8bn of tax, of which £5.87bn has already been repaid.

Meanwhile insolvencynews.com has discovered that HMRC will not be publishing any more figures on time to pay after July.

A spokesman for HMRC said a consultation on continuing to publish the figures was launched earlier this year, although no press release was issued because the subject was not deemed “high profile” enough.

The consultation received no responses other than one from the Treasury and one internal response from HMRC. HMRC then decided that the July 2011 release of time to pay figures will be the last.

HMRC added that the majority of businesses that have entered into time to pay arrangements are “fundamentally viable” and are still in business “in no small part” due to the practical support provided by its arrangements.

The spokesman for the authority added: “Around 90 per cent of the tax rescheduled has been paid and this, coupled with the enormous benefits that small businesses deliver to the country through tax revenues, jobs, and long term expansion, strongly justifies our pragmatic approach.”

HMRC said the £650m is collectable and will either be subject to further time to pay when appropriate, or to its normal debt collection procedures.

Those arrangements which have not been paid in accordance with their schedules will have undergone standard HMRC recovery and enforcement action.

This will involve further recoveries, but HMRC said it is not possible to identify these separately as being related to earlier time to pay agreements.

HMRC’s spokesperson added: “Time to pay is designed to help businesses with short term cash flow difficulties and we are well aware that multiple applications may be evidence of a deeper structural problem with implications for the long term survival of the business.

“So when a business makes multiple applications we probe to ensure the request is driven by a short term cash flow problem, rather than a deeper and insurmountable one.”