HMRC tax deferral system flops
A £5.2 billion business tax support scheme set up by the previous government has flopped after the criteria to access the scheme were tightened by the previous Labour government. Since December last year companies looking to defer over £1 million of VAT, PAYE or corporation tax have undergone challenging interviews with the Revenue and been forced to pay £30,000 for an independent review of their specific needs. As a consequence, the number of companies applying to the scheme has fallen dramatically and it is effectively worthless to the UK business arena.
In many ways this fully reflects both the past and present political strategies of governments over the years who tend to go for the headline grabbing moves only to change the goalposts at a later date. It seems bizarre that the authorities would go through the long-winded procedure of setting up such a potentially useful scheme only to tighten the criteria and effectively kill the situation stone dead.
There are many companies in the UK who are struggling to meet their VAT, PAYE and corporation tax liabilities in the short to medium term and any improvement in cash flow would have been welcomed.
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