HMRC turning down VAT requests

Date: 14th May 2010

Small businesses owners in the UK could be among those encouraged to seek accountancy services following the results of a recent Freedom of Information request.

The request from IT finance provider Syscap revealed that HM Revenue & Customs (HMRC) turned down twice as many VAT Time to Pay requests in the first quarter of this year.

According to the figures, 11.2 per cent of requests were turned down by HMRC in the three months to March 2010.

By way of contrast, just 5.3 per cent of requests were rejected by the department in the same period last year.

Philip White, Syscap's chief executive, said that the Time to Pay agreements, which allow businesses to defer their tax payments, are important as many firms are reliant on the payment of customer invoices to be able to meet their obligations.

"[Smaller firms] are still finding it incredibly hard to borrow money from their bank to pay HMRC VAT so news that the HMRC refusal rate has shot up is worrying," he said

"Whilst HMRC say there is no change in policy over granting credit for VAT payments it does seem they are enforcing existing policy in a way that has increased the number of refusals quite dramatically."

Posted by Jacob Williams