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Consultation: Payments, Repayments and Debt: The Next Stage

Background
Aim
Key features
Timeline
Our view

Background

Following legislation introduced in FA 2008, HMRC has issued a further consultation document entitled 'Payments, Repayment and Debt: The Next Stage'. The objective is to deliver more efficient systems for payment, repayment and debt management through a more taxpayer focused approach, making it easier for taxpayers to pay and enabling HMRC to tackle debt more effectively.




Aim

The intention is to produce a fairer, modernised payment, repayment and debt collection system that:

  • fully supports those who wish to pay what they owe on time;
  • helps those who may have difficulty paying;
  • takes more effective action against those who seek to gain an advantage through not meeting their liabilities or delaying payment.





Key features

The consultation focuses on the following areas:
  • a voluntary and flexible monthly instalment payment scheme on a single tax basis for income taxpayers corporation taxpayers not within the Quarterly Instalment Payment (QIP) regime;
  • award of costs in successful court actions in relation to late payment;
  • extension of HMRC's ability to collect small debts collected through the PAYE system;
  • tracing missing debtors through third parties;
  • encouraging compliance through the greater use of financial securities for seriously non-compliant businesses and the introduction of tax clearance certificates confirming to businesses that they are fully compliant with their tax obligations.





Timeline

Subject to consultation, these proposed changes may be introduced in Finance Bill 2009, to take effect from an appointed date thereafter.

The consultation is open until 13 February 2009 and HMRC propose to publish responses around Budget 2009 with any changes introduced through the 2009 Finance Bill.





Our view
The proposed voluntary scheme for instalment payments will be attractive to taxpayers in helping to manage cash flow. It should also help taxpayers in arrears and enable them to manage their tax payment obligations more easily in the future.The proposed voluntary scheme for instalment payments will be attractive to taxpayers in helping to manage cash flow. It should also help taxpayers in arrears and enable them to manage their tax payment obligations more easily in the future.