Pictured above: Martin Williamson
Changes in the way the tax man treats companies with money
difficulties could lead businesses back into trouble just as they
are recovering from the worst recession for many years.
Martin Williamson, a Stoke-on-Trent based Licensed Insolvency
Practitioner, has warned that HM Revenue & Customs (HMRC) is
putting business in jeopardy by tightening the Time To Pay (TTP)
regulations which give leeway to companies struggling to pay their
tax bills.
And the actions could backfire on the Government with billions
of pounds being lost to the Treasury according to Mr Williamson of
ipd.
Mr Williamson said: "While it is clear that TTP has been abused
by some companies who could actually pay on time, it has also been
useful in giving extra time to companies who just needed some
leeway.
"TTP is available to companies until 2015 but analysts believe
HMRC is set to formally reduce the time available to pay by a third
to 12 months.
"In practice, I believe this is already happening anyway as the
majority of TTP schemes I have come across, or negotiated on behalf
of clients, during 2010 have been limited to 12 months anyway."
Mr Williamson, a Licensed Insolvency Practitioner, with 24 years
experience, added: "With the strong possibility of a
"double-dip" recession, most probably during the first six months
of 2011, properly managed TTP schemes could mean the difference
between survival or failure for many companies. HMRC needs to
recognise this.
"In addition to the affect on companies, HMRC's own recent
annual report showed that TTP led to the recovery of £2
billion of tax that would have otherwise been lost to the
Government in the last financial year."
Insolvency Practitioners, including Mr Williamson, fear for the
future of TTPs following a move by HMRC to withhold statistical
information.
He explained: "This information is used by Insolvency
Practitioners to determine if a business is likely to be successful
in achieving a TTP, or whether time and effort could be better
utilised pursuing another strategy to protect the business. HMRC's
stance effectively leaves me (and other advisors) with no
benchmarks to work to."