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More than 4,500 firms need HMRC help

Published on 3 Mar 2010 under category: legal

More firms than ever are reliant on the government's 'Time to Pay' scheme in order to ward off insolvency.

HM Revenue & Customs (HMRC) reported this week that over 160,000 businesses have arranged tax payments through the scheme, while they are suffering poor cash flow.

According to the government agency, more than 4,500 firms request help every week – adding up to just over £5 billion worth of outstanding tax payments rescheduled since the scheme began in November 2008.

The taxes covered by the arrangement plans include PAYE, National Insurance, VAT and any other HMRC taxes.

Experts have expressed concerns about a 'lag effect' from when the scheme winds down, arguing that it has provided a floor for businesses that would have gone under during the recession.

However, Stephen Timms, the financial secretary to the treasury, said yesterday (March 2nd): "The scheme will remain in place as long as necessary, as we want to continue to help businesses through the difficulties they are facing, because small businesses are the backbone of the British economy and have a vital part to play in our economic recovery."

If you require advice on Insolvency and Bankruptcy please call us on +44 (0)20 7831 0101 and ask for Katherine Sillett.