If they are, you may already be aware of, or even using, the HMRC's Business Payment Support Service (BPSS). Established in late 2008 as the recession deepened, this service is intended to help businesses spread their tax payments over time, reducing cash flow pressures.
If you've got this far without needing to use BPSS, well done. But the continued uncertainty of 2010 means you might yet have a need. So I thought you might be interested to hear how it's worked for others.
I took advantage of the scheme almost as soon as it was launched. I was working with two firms with VAT payments due in January 2009 and neither had the cash to pay. I called the BPSS and in both cases they agreed to the VAT payment being deferred into three monthly instalments. They asked very few questions and took very few details. It all felt remarkably informal, particularly given that I was talking to HMRC.
I used the scheme again at the end of the next quarter and once more it was easy to arrange. But this time they wanted some assurance, though only verbal, that they'd get the money.
I conducted an informal survey of the experience of other businesses through UK Business Forums. The feedback is that most businesses have received favourable treatment so far, but it does seem to depend on who answers the phone at HMRC's end.
One accountant reported that a client had two very different experiences on the same day. One VAT office insisted they spend time providing 12 months accounts and cash flow forecasts while the other office allowed a deferral of over £50k of VAT and PAYE with virtually no questions asked.
There are signs that HMRC are tightening up. If you're calling to defer your payment for the third or fourth time you'll probably find it harder to get what you want. Regular users of the service are being challenged about what other steps they can take to improve their cash situation. Some are being told that repeat calls will increase the likelihood of a VAT inspection in the near future.
HMRC originally intended the BPSS to be available for 2009 only. But in his pre-budget report last month the Chancellor announced it would continue for as long as necessary. On the other hand, the UK government needs all the money it can get and I'm sure it would like to reduce the one billion pounds it's lending to UK businesses through BPSS.
One of the UK's top accountancy firms, Wilkins Kennedy, believes the service is being wound down as the government tightens its belt. Director Anthony Cork, quoted on bytestart.co.uk, says businesses will probably need even more support as the economy picks up.
So if you're beginning 2010 with cash flow woes and you make VAT, PAYE or Corporation Tax payments, you should do all you can to exploit the opportunities for deferring these with BPSS.
But be prepared to make a good case - the reason why you need to defer and, more importantly, the reason why you're confident you can pay in the future. You might have to argue for a deferral, but at the end of the day BPSS is there to help UK businesses.
