The Fizz! Blog

Requests to delay payment of VAT will still very probably be accepted

It's not a very interesting title for a blog article, is it?  Which is probably why the press has been describing some new statistics on "Time to Pay" arrangements a bit differently over the last few days.

For the last couple of years HMRC have offered a "Business Payment Support Service" - enabling businesses to agree payment plans for tax bills that they can't afford to pay in one go - commonly referred to as "Time to Pay" arrangements.  There have been a few stories in the papers and trade press over the last few days - like this one in Taxation - about HMRC turning down twice as many requests now as they were rejecting at the end of last year.

That's one way of looking at it.  But, if you actually examine the numbers, there's another way of interpreting it:

Businesses seeking time to pay on VAT bills are twice as likely to have their application rejected as they were last year, according to a leading independent finance provider.

Figures obtained by the company Syscap under the Freedom of Information Act show that the number of refusals by HMRC of requests to delay VAT payments more than doubled to 11.2% in the first quarter of 2010, compared with 5.3% in the same period of 2009.

So, in other words, in Q4 of 2009 94.7% of requests to delay payment were accepted - nearly all of them - and in Q1 of 2010 88.8% of requests to delay payment were accepted - nearly all of them.  I'd suggest that the title of this blog is just as valid as the (also accurate) description of refusals doubling.

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Some business now need to pay their VAT a little earlier

We've mentioned this before, but it bears repeating.  As of 1 April, HMRC will consider that you've paid your VAT when your cheque clears their bank account, not - as is the case at present - when they receive your cheque.  That means that, if you pay by cheque, you need to make sure you send it a few days before the end of the month - otherwise you run the risk of being deemed to have paid late, which can result in your having to pay a surcharge.

If you want to get round this, you can pay online (which gives you an extra seven days' grace) or by direct debit (ten days' grace).  More information here:

http://www.hmrc.gov.uk/payinghmrc/vat.htm

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PAYE year-end filing

The year-end deadlines for giving employees their P60s and getting your year-end returns in to HMRC are approaching.  If we run your payroll we'll be managing this process for you, but if you do it yourself here are the deadlines:

http://www.hmrc.gov.uk/paye/payroll/year-end/checklist.htm

Importantly, this is the first year that almost all businesses are obliged to make their year-end returns to HMRC online.  If you're going to do that yourself, you'll have to register for PAYE Online (details on the same link as before) and the details will be sent out to you by post - so you can't leave registration until the last minute.  So, if you need a PAYE Online account, apply for it now.  If we run your payroll you don't need an account, though.

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Start thinking about your personal tax return

While we're on the subject of tax-year-driven deadlines, you might want to start thinking about your personal tax return for the tax year just ended - the year to 5 April 2010.  The actual deadlines for submitting the return are 31 October 2010 (if you're submitting it on paper) or 31 January (if you're submitting online - which is the case if we prepare your tax return for you).  Obviously very few people have yet submitted their return (except for Jane and my Dad) but there's no reason to leave things until the last minute.  In fact, there may well be benefits for getting it in early.

For example, if you've tax to pay, the sooner you know the amount the better - it's much better to know the amount now than at the last minute, especially if you don't have the cash immediately to hand.  If you normally make payments on account of tax in January and July, then getting your return done before the end of July may enable you to reduce your July payment, and get some of your January payment back.  And in any case it's easier to collate or pass on the bits and pieces of paperwork now as they arrive from banks and the like, rather than trying to dig them all out in the New Year.

And if you're due a refund, the sooner you get your return in, the sooner you'll get your money back!

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