Author: Hannah Gilchrist
Date: 08/02/2010
With the HM Revenue and Customs ‘Time to Pay’ scheme expected to reach an end in May, will your business be left in the lurch?
The £4.8 billion scheme has helped 160,000 businesses employing 1.2 million people throughout the recession. But with the predicted general election in May, many are worrying that the scheme will be axed forcing companies to repay money immediately.
Currently the programme allows struggling businesses to delay their VAT, national insurance and other tax payments. Yet, is this initiative just prolonging the inevitable?
Britain officially returned to economic growth in the final quarter of last year, and while the numbers of failing companies has levelled off, this latest news could see greater levels of financial distress in the second half of 2010. Malcolm Shierson, a partner at Grant Thornton's recovery and reorganisation practice, agrees.
‘We expect the number of liquidations to shoot up even further when the future government stops extending the 'time to pay' tax scheme,’ he said.
However, while scrapping the scheme seems likely, the Government has insisted that they will ensure as much flexibility as possible.
A Treasury spokesman told the Independent: ‘The 'time to pay' scheme has been hugely beneficial for businesses facing difficulties and will continue to run as long as necessary. Any suggestion that it will end suddenly and businesses forced to repay is incorrect and runs counter to what the scheme was set up to achieve.’