HM Revenue and Customs issues new tax deferral procedure

HM Revenue and Customs, the heart of the UK government's taxation service, has this week introduced new procedures regarding potential tax deferrals involving amounts over £1 million. As of 1 April all tax deferral requests regarding amounts of £1 million over will need to be presented with supporting evidence from a totally independent third-party before consideration by HM Revenue and Customs.

While there is no doubt that the UK government has literally saved many UK businesses from going under simply by allowing them to defer their tax payments during the recession, there are fears this new move will introduce added fees to businesses which may already be struggling. The reference to "independent third parties" would effectively rule out a company's existing accountant or adviser therefore creating an added cost which could be substantial in some cases.

However, from the government's point of view there is a need to increase tax income in the short to medium term to assist with the public purse and those who may well be on the borderline between deferral and non-deferral of tax liabilities will come under great scrutiny. So far there has been no response from business associations in the UK but these will no doubt be forthcoming in due course.