According to Syscap, an independent lender, there has been a 41 percent increase in the number of businesses borrowing money to finance their tax bills during the last year. In the run up to the deadline for filing online self-assessment tax returns, 31st January 2011, Syscap have £31m of outstanding funding requests compared with £22m in January 2010. The company believe that the ‘Time to Pay’ scheme launched by HM Revenue & Customs is harder to access than previously, which is causing hardship for many small businesses.
The Time to Pay scheme was introduced by HMRC in 2008 in order to help businesses spread their payments over a longer period, usually three months. A statement issued by HMRC contradicted this view, and read:
“HMRC will continue to offer a sympathetic ear to businesses- and individuals- in temporary financial difficulty and will continue to offer this service as part of our time to pay arrangements for as long as it is needed.”
Syscap have also blamed the increased difficulties for payment on the new 50 percent tax rate which will affect any sole trader or individual with an income over £150,000, and the new Value Added Tax rate of 20 percent.
Online accountancy can help to minimise financial worries for many businesses, as accounts and tax returns can be completed using real time figures, avoiding unexpected tax bills. The timely submission of administration to low cost accountants will keep you informed of your financial status and help you to meet crucial deadlines set by HMRC, avoiding penalties and fines.
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