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Tuesday
Oct192010

HMRC Tax Deferral System Bites the Dust

I have seen many businesses struggling to stay afloat since the recession. Even now we are out of the woods it is still difficult to maintain a solid cash flow in many cases.

The previous Labour government made much of its tax deferral scheme – a scheme which was said to have cost over five billion pounds. The idea was to help businesses defer payments for VAT and tax if they owed more than one million pounds.

However it was not as simple as it sounds. In order to be considered for the scheme the business in question had to pay £30,000 to trigger a review of their financial situation. This hefty fee vastly decreased the number of businesses opting for the method. This in turn made the tax deferral system practically useless. After all, if you were looking to defer tax because your business was going through a tough time financially, the chances were good that you wouldn’t have £30,000 to spare to pay for the review.

Personally speaking I had my doubts about the scheme from day one. I think it is good it has been brought to an end because the results were never going to be worth it particularly as such a huge fee was required to be considered for the scheme. There are better ways to ensure you are able to pay all the tax you owe, and one of them is to plan ahead financially as best you can.

Any business requiring tax assistance will be able to contact St Matthew by using the link above. If you require help or advice in this sense we can provide it confidentially at all times.

 

 

 



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