Sheffield firms have been warned to look out after a significant fall in the number of ‘Time to Pay’ arrangements agreed by HM Revenue & Customs.
The arrangements, introduced in 2009, helps individuals and companies with short-term cash flow difficulties by giving them additional time to pay their tax bills.
Kirsty Swinburn, tax manager at leading independent accountants, Barber Harrison & Platt, says the number of arrangements agreed in the first three months of 2011 fell from 57,800 to 32,900, while the number of requests refused rose from 2,360 in the first three months of last year to 3,390.
HM Revenue & Customs says the criteria for arrangements are unchanged, but Miss Swinburn says the taxman appears to be looking more favourably on first time applicants and people are finding it more difficult to obtain an agreement if one has been granted in the past.
What’s more, most deals are now being restricted to three months, whereas in the past, agreement was often reached to spread the payments over a year.
Kirsty Swinburn says local firms must recognise the critical importance of presenting a well-thought through and thoroughly prepared case to HMRC when seeking to agree a Time to Pay arrangement.