How to defer tax!

Some 20,000 businesses who contacted the Business Payment Support Service have between them arranged to defer tax of over £350m. We provide some practical pointers for using this new HMRC service.

A recent HMRC press release gave some information about the activities of the Business Payment Support Service (BPSS) since its launch in November 2008. By 14 January, 20,000 businesses who contacted the BPSS have delayed paying a total of more than £350m tax.

The BPSS is designed to help people who are struggling to pay their tax on time, by setting up suitable payment arrangements. The taxes it can deal with include income tax, corporation tax, PAYE, National Insurance contributions and VAT. The phone number is 0845 302 1435 and it is open seven days a week (8am to 8pm Monday to Friday, 8am to 4pm at weekends). Further information is available on the BPSS page of the HMRC website.

The following points may be useful:

Although the service is aimed primarily at businesses, it can be used by any taxpayer.

Once payment terms are agreed, HMRC will not charge late payment surcharges on payments included in the arrangement, although interest will continue to be charged where it applies.

The BPSS can only deal with new requests for time to pay, not with existing debts where there the taxpayer is already in contact with HMRC.

HMRC will have three main questions for callers:

• What do you need to pay at the end of the month?
• Why can't you pay it then?
• When will you be able to pay?

In the majority of cases, HMRC will be able to make a decision in around 10 minutes.

For larger liabilities or more complicated cases, HMRC may need to have a longer discussion or request more information.

HMRC ask callers to have the following information to hand:

• Your tax reference number.
• Details of the tax that you have, or will have, trouble paying.
• Basic details of your businesses income and outgoings.

The Tax Faculty also suggests that:

• Non-business taxpayers should have details of their income and outgoings.
• All callers should consider what sort of payment terms they could sensibly manage.

http://www.ukba.co.uk