Pay business taxes in instalments
If you are having difficulty paying your taxes, help is at hand – provided you are a business. A new HM Revenue & Customs (HMRC) support service allows businesses affected by the current economic conditions to temporarily delay their tax payments. Instalment arrangements will be tailored to individual circumstances.
The service, which the Chancellor of the Exchequer announced in his Pre-Budget Report in November, covers income and corporation tax, national insurance, VAT and any other payments owed to HMRC.
If you think you will not be able to make a payment, you simply phone 0845 302 1435, provide your tax reference number, details of the tax you are having trouble paying and basic details of your business income and outgoings. HMRC says it will normally give a decision within ten minutes.
Paying late under this arrangement you will still be charged interest, currently at 5.5% for most taxes. However HMRC will not charge late payment surcharges where they would otherwise arise, for example where HMRC agrees to your paying income tax for 2007/08 later than 28 February 2009.
Keep in contact
HMRC says the support line is only for new enquires and that if you have already been chased for overdue tax you should continue dealing with the office that originally contacted you.
However, it seems that you will be able to discuss payment arrangements with that office, and even if you have received a warning letter about court action, you can contact the support line if you cannot get through to the office that sent the letter.
There are, however, limits to HMRC’s new-found helpfulness. If you have already paid your taxes and are now experiencing cash flow problems, HMRC will not make repayments unless your tax bill is reduced. So you need to plan ahead carefully.
Remember too that delaying your tax payments can never be a solution to all your cash flow needs. We can help you manage cash flow and explore ways in which you might be able to obtain finance. And whether or not you are in financial difficulty, we will ensure you have claimed all available tax reliefs so that you are not paying more tax than necessary.