Business News
‘Time to Pay’ scheme under fire from SFP
Business turnaround specialists SFP, have warned that the ‘Time to Pay’ initiative brought about by the Government to allow businesses to postpone the payment of tax could in fact be counterproductive by shielding massive debts and thus plunging many companies into far deeper water than they anticipated.
Simon Plant, speaking from SFP said "Time to Pay is the ticking time bomb that no-one wants to mention, but with HMRC now quite literally 'calling in their debts', those that have failed to accrue for those debts or naively believe they will be given more time are in for a rude awakening."
The research also found that in line with this initiative, three out of every four cases worked on cite HM Revenue and Customs (HMRC) as the largest single creditor at the point the company enters administration, and amounts of as much as £500,000 could be owed to the taxman.
Plant continued, "These are quite extraordinary sums of money that seriously impact on cash flow and not infrequently lead to a company's collapse without professional help."
It is not just the actions of these companies that have the SFP concerned, but also the nature of their business and the size, with SME’s in particular falling foul.
Plant expressed concern that, "The economic downturn seems to be affecting all manner of businesses from printing companies to recruitment agencies, but it is the SME sector with relatively modest turnovers employing 40 or 50 staff that seem to be suffering most, The larger companies are the ones that of course attract the headlines, but the hidden tragedy lies within the SME community."
Some examples of recent casualties are below:
• Antrac, a £2m turnover waste management business which failed with the loss of 30 jobs and HMRC debts of £200,000
• Darby Glass, a £4m turnover glass processor employing 60 staff business that entered into administration owing HMRC £420,000
• Protech Integrated Services, a security firm owing £450,000 to HMRC that was successfully sold saving 60 jobs
