Do you feel that all attention tends to be focussed on the larger companies during this economic downturn? So do we! Hence the reason for 1^st Contact’s creation of this useful point of reference with any news stories that should be relevant to small and local businesses. Such businesses are also the lifeblood of our economy and we would like to think that they will have a good chance of getting through this current recession. In any event, 1^st Contact are here to provide you with the essential advice and support when you may feel that you need it the most.  

According to the most recent report, there were a number of businesses asking for some extra time for which to pay their PAYE, VAT and other tax contributions before the January deadline was up. In excess of 40,000 businesses were granted the extra time to pay the £650 million corporation taxes, VAT and PAYE. In the seven weeks to January 14^th 2009, over 20,000 companies agreed to defer their payments of over £350 million. 

Who was able to take advantage of this latest scheme by the HMRC? Construction firms did account for a quarter of the 60,000 firms due to the great downturn in home construction and renovations. Also many retailers and manufacturers also took advantage of this opportunity to defer their tax contributions. 

But, not every business is accepted into the plan for deferment. About 600 firms were turned down by the HMRC upon applying for extra time. Each company is scrutinised on an individual basis and the HMRC will do anything to help a business to spread out their tax payments over several weeks during this challenging time. By taking advantage of the deferral programme, your company will avoid penalties and fines. The average deferral period is from three to six months. 1^st Contact will be able to discuss any tax related matters and they can provide assistance and support through these hard times to provide your company with a far better chance of surviving. 

However, as long as you let the HMRC know that you will be a bit late in sending in your PAYE contributions in writing, this should be helpful. According to a recent report, the Tax Service was sorely behind in checking all of its returns from 2005-06. So if you are sitting in the dark wondering if you will be fined or something worse, you might be okay.  

Over 11.5 million persons or 32% in the PAYE system still had not been checked from those years. The problem lies with the claims from the companies not matching the workers’ records. Most of the filers will have paid the proper amount and can go about their business. This problem occurred when the economy was in an upswing, the year 2007, and more workers were being brought into the tax system. Nowadays, it is the other way around. 

Keep checking this site for up-to-date and similar news stories which may affect your business over the coming months.

1st Contact Tax offers specialist tax services to contracting professionals.
These services include: Contractor Accounting, Contractor Umbrella payroll, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.