Small firms may have tax deferment option
Thu, 08 Oct 2009
Small firms that are struggling to meet outstanding tax bills due to unforeseen circumstances may be able to take advantage of a government scheme which allows them to defer payment.
The 'time to pay' arrangements, made with the agreement of HM Revenue & Customs (HMRC), are being used by IT firms in particular, it is reported.
HMRC says the arrangements for the IT sector add up to some £291 million in owed tax, with the combined total for all sectors £3.71 billion.
Bill Dodwell, head of the tax policy group for Deloitte, said many companies and independent contractors were taking advantage of the initiative because they are experiencing delays in getting paid themselves.
He added: "It's the small, self-employed, limited companies that use [the time to pay scheme], because tax bills are usually paid in fairly lumpy amounts, and that's what hit people.
"I think it's something which applies to a number of businesses generally where they are dependent on major customers."
Mr Dodwell said it was "good news" that HMRC is actively helping small companies negotiate the downturn.
According to UK Trade and Investment, the IT sector contributed £66.4 billion to the economy in 2008.
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