Help with tax payments: Time To Pay and Extended Loss relief

24 February 2009

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If you are experiencing cash flow difficulties and having trouble meeting tax payments, there may be a couple of schemes from HM Revenue & Customs (HMRC) that could help your business.

Time To Pay and the Business Payment Support Line

If you're worried about being able to meet tax, National Insurance, VAT or other payments owed to HMRC, or you expect that payments coming due will cause you problems, you may be able to take advantage of HMRC's Time To Pay (TTP) service. To access this you need to call the HMRC's Business Payment Support Line on 0845 302 1435. This is open Monday to Friday, 8.00am to 8.00 pm and Saturday to Sunday, 8.00 am to 4.00 pm.

HMRC staff will review your circumstances and discuss temporary options tailored to your business needs, such as arranging for you to make payments over a longer period.
You will not be charged additional late payment surcharges on payments included in the arrangement, although interest will continue to be payable on those taxes where it applies.

When to contact the Support Line

If you have payments due now or in the near future, the sooner you get in touch, the better. If your payment isn't due yet, you can ring the Support Line nearer the time once you are clear about whether you will be able to pay or not. However, it is important that you get in touch with HMRC in advance, not once your payment is overdue.
In most cases you should be able to get a decision within 10 minutes. Larger debts and those that are more complicated may take longer.

You will need to supply the following information:

your tax reference number
details of the tax that you are or will have trouble paying
basic details of your businesses income and outgoings

Please note: The Business Payment Support Line is for new enquiries only. If you have already been contacted regarding an overdue payment it's important that you call the original office that contacted you.

Extended Loss relief

A relief announced in November's Pre-Budget Report may also be able to help your tax payment position. All companies and unincorporated businesses that incur trading losses can extend their ability to carry trading losses back against profits of earlier years to get a tax repayment.

This is effective for losses incurred in accounting periods ending between 24 November 2008 and 23 November 2009. For unincorporated businesses, the measure will have effect in relation to trading losses for tax year 2008-09.

All businesses have a number of means available to them to ensure that tax from profitable years is off-set against losses that arise in subsequent periods when times are harder:

Businesses can offset unlimited trading losses against profits in the preceding year and thereby reclaim tax previously paid.
Start-up unincorporated businesses in the early years of operation can carry trading losses back for three years.
Businesses ceasing to trade can also carry trading losses back for three years.
Ongoing trading losses can be offset against profits in future years.

The extension will apply for one year and extend the period that current trading losses from businesses can be carried back against previous profits, from the current one year entitlement to a period of three years, with losses being carried back against later years first.

The amount of losses that can be carried back to the preceding year is unlimited. After this, a maximum of £50,000 of the balance of unused losses is then available for carry back to the earlier two years.

Unincorporated businesses may make a loss claim under the new rules as soon as they have calculated their losses for their basis period for tax year 2008-09.

More information on both of these schemes can be found on HMRC's website.

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Help with tax payments: Time To Pay and Extended Loss relief

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