20 October 2009

The government’s scheme to ease tax demands on small businesses has mounted to £2.5bn as 141,000 tax rescheduling agreements have gone through in the last six months.

But there are warnings that HM Revenue & Customs’ Business Payment Support Service could threaten companies this autumn when the repayment of taxes will be demanded and a possible increase in interest rates applied.

Stephen Alambritis of the Federation of Small Businesses told the Observer : ‘This shows the VAT man is up to speed but there is a feeling they are tightening the parameters. We don’t want to hoodwink businesses [into this scheme] and then send in debt collectors to get the money back.’

The BPSS system is to help small business that are struggling to survive the current economic conditions and want to avoid the issue of late payments. In April the chancellor extended the use of the scheme by allowing businesses to anticipate any losses – rather than wait for the end of the accounting period - as part of any rescheduling of their tax payments.

The BPSS can be contacted on 0845 302 1435 from 8am to 8pm Monday to Friday and from 8am to 4pm at weekends. Further information is available at: http://www.hmrc.gov.uk/pbr2008/business-payment.htm .

Issued by HM Revenue & Customs Press Office