Budget 2010: Time to Pay extended into the next parliament

HMRC is to continue its Time to Pay option giving businesses breathing space
from their tax obligations.

The chancellor announced in his latest budget the scheme would continue for
the whole of the next parliament.

However this could increase pressure on HMRC.

“There is a risk that the extension could end up being costly to the Revenue
if it keeps going that long,” said John Cullinane, a tax partner at Deloitte.

Cullinane added he was surprised the chancellor increased Time to Pay options
for five years instead of one.

Another side effect could involve banks requesting businesses seek Time to
Pay options before they will lend.

The scheme was launched in November 2008 with the option taken up by more
than 200,000 businesses, equating to tax deferrals in excess of £5.2bn.

A Forum of Private Business poll found more than 60% of businesses gave their
backing to the tax deferral scheme.

HMRC revealed earlier this week there would be changes to the approval of
time to pay for large businesses.

Insolvency practitioners will be involved in constructing a business review
on whether or not larger companies can qualify for the tax deferral.

Further reading:

Insolvency
practitioners to receive £11m boost from new tax rules

HMRC
imposes tougher rules on Time To Pay