Tax support service gets go-ahead despite warnings

Lawyers have given HM Revenue and Customs (HMRC) the green light to continue its scheme to allow struggling businesses to delay PAYE and VAT payments, it was reported yesterday.

HMRC’s Business Payment Support Service came into effect after the pre-Budget report last November and has already filled around 177,000 requests to defer more than £3bn in taxes for up to six months.

The service says by giving business owners a decision over whether they can defer their payments ’in about ten minutes’, it has saved thousands of businesses.

But the scheme has provoked criticism from experts, who have raised concerns it might be allowing companies which should have gone out of business to continue operating.

A piece in The Herald last week quoted business accountant Eileen Blackburn: “The sums are worrying and already questions are being asked about how much of these deferred payments the Inland Revenue will eventually realise,” she said.

“The scheme was predicated on the rather rosy assumption that cashflow would, within a matter of months, be restored not only to previous levels but to levels which would give companies enough of a surplus to pay off the deferred debts as well.

“The evidence that this is happening is pretty thin on the ground.”

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