Recent statistics from HMRC
The Business Payment Support Service (BPSS) is designed to help taxpayers who are having difficulty paying all their tax on time. It provides an easy route to someone at HMRC who can make a decision.
The BPSS was set up in November 2008, in response to the economic downturn, and it is still running. HMRC regularly publishes statistics on the BPSS’s activities, and the latest report covers the period from November 2008 to 30 June 2011. It contains some interesting information.
The BPSS is open to both businesses and individuals and covers a wide range of taxes. If the taxpayer agrees Time to Pay (TTP) before the due date, and keeps to agreement, HMRC will waive penalties and surcharges (though there will still be late payment interest). More information including contact details is on the HMRC website.
A summary of the results
Since the BPSS began:
444,400 arrangements were granted which were worth £7.71bn.
£6.69bn has already been paid to HMRC from mature arrangements (ie those for which payments have started).
Demand in 2010 was 60% of the 2009 levels for the number of requests and 59% for the value considered.
Demand in the first half of 2011 was 37% of the 2009 levels for the number of requests and 36% for the value considered.
46% of the total number of arrangements were for VAT, equating to 50% of the total value of all arrangements.
61% of the total number of arrangements were for a period of three or fewer months, equating to 65% of the total value of all arrangements.
61% of the total number of arrangements were for requests under £10,000, equating to 15% of the total value of all arrangements.
37% of the total number of arrangements were for requests between £10,000 and £100,000, equating to 59% of the total value of all arrangements.
23,300 TTP requests, worth a total of £1.08bn, have been refused by HMRC.
It should be noted that in these statistics HMRC counts the number of ‘arrangements’ made, not the number of taxpayers helped. Each arrangement relates to a particular head of duty, so one taxpayer owing several types of tax could have several arrangements.
The report also provides more detailed analyses of the statistics – for example, looking at UK regions, types of tax, and the peak times of demand.
Some comments on the figures
It seems from the figures that the BPSS has been successful in helping businesses and other taxpayers with relatively short-term payment problems. HMRC has also been successful in collecting the money due under TTP arrangements.
Demand for the BPSS is falling – requests in the first half of 2011 were 37% of 2009 levels.
The number of requests declined by HMRC is relatively small compared to the total TTP arrangements granted. However, the percentage of requests declined is increasing. The percentage declined was 2.7% ín 2009, 6.0% in 2010 and 11.8% in 2011.
Part of the reason for this may be that the proportion of repeat requests is growing, according to an item about the BPSS in HMRC’s Working Together Bulletin 44. HMRC states that its policy on time to pay has not changed, but it does look more closely at repeat requests to see if the business might in fact be in a position to pay, or to see if it is viable. If HMRC concludes the business is not viable, it may refuse a repeat request because giving further time to pay would put more tax at risk.
The Tax Faculty would be interested to hear about agents’ or taxpayers’ recent experiences of using the BPSS. Please post your comments below.