Tax funding provider and lessor Syscap has accused HM Revenue and Customs of winding down its Time to Pay scheme, claiming businesses should no longer rely on it.
Time to Pay (TTP) provides a short-term payment holiday for businesses unable to meet their tax bills. If businesses are unable to gain the tax relief, Syscap’s tax funding service could help to bridge the gap.
A total of 114,600 requests were made for TTP arrangements betweeen January and September 2010, of which 6,290 were declined.
Philip White, Syscap CEO, accused HMRC of intentionally making it harder for businesses to qualify, claiming the percentage of declined requests has grown from 2.6 percent for the whole of 2009 to 5.2 percent for the year to end September in 2010.
Meanwhile, Syscap has experienced an upturn in requests for tax funding of 132 percent between April and July this year, a trend it attributed to the lower number of approved TTP requests.
White said: “We’ve maintained a prudent approach to lending and we’ve continued with appropriate and robust due diligence.”
A spokeswoman for HMRC denied TTP criteria had become more difficult to meet, saying: “HMRC remains absolutely committed to demonstrating a sympathetic approach to businesses with genuine, short-term difficulties. We’re not getting tougher on making TTP arrangements and we’re using exactly the same criteria as we’ve always used.”
She added that there were no plans to wind the scheme down.
White said: “It’s become an exclusive club and the HMRC is making membership harder. We’ve seen customers who have taken three months to go through the application process. By the time it’s taken three months, the game’s over and you have to pay anyway.
“It’s putting further pressure on cash-strapped businesses that had become reliant on the facility in the absence of appropriate funding from institutional lending sources.
“The worst thing that could happen is that a business applies, gets rejected, and is left in the lurch. We suspect that is now going to happen more frequently.”