HM Revenue and Customs (HMRC) has rejected 23,300 ‘time to pay’ requests worth £1.08bn, according to the last set of figures that will be published on the scheme.Although £1.02bn of taxpayers’ money is outstanding under the scheme, of which about £650m is overdue from businesses, HMRC will no longer publish these figures.
The figures published by HMRC’s Business Payment Support Service (BPSS), show that just over 444,000 time to pay agreements have been made since November 2008, which were worth £7.71bn, as HMRC effectively provided a life line of working capital in the aftermath of Lehman Brothers’ collapse.
Some £6.69bn of the £7.71bn has been repaid while refusals have steadily risen since 2009. The figures show that 3% of applications were refused in 2009, 6% were declined in 2010 and 11.08% were refused in 2011. There were 2,970 refusals during the second quarter of 2011 compared with 2,250 in the same period in 2010.
HMRC said repeat requests from businesses were more likely to be refused, as they may show that a firm is no longer viable.
The spokesman said: “The majority of businesses that have entered into time to pay arrangements with us are fundamentally viable and are still in business, in no small part due to the practical support provided by our time to pay arrangements”.
The overall figures show a steady decline in the number and value of time to pay agreements since their peak in January 2009.
There were 48,500 new agreements in the first half of this year worth £860m, compared to 51,310 agreements worth £920m during the prior six months.
The South East had the largest number of businesses with time to pay arrangements. As at June, companies in this region had just over 66,000 agreements to defer £1.1bn of tax.
Controversy surrounds the fact that July’s time to pay figures will be the last time that they are published.
HMRC launched a consultation on whether it should continue to publish the figures earlier this year, although no press release was issued, and none of the recognised professional bodies or trade body R3 was aware. The consultation only had two responses – from HMRC internally and the Treasury.
R3 president Frances Coulson said: “We are concerned to learn that HMRC will no longer publish the official statistics on this from July. We believe they are in the public interest”.