According to new figures published by IT service provider Syscap, the number of Time To Pay VAT requests rejected by HMRC has more than doubled in the first 3 months of 2010.
This is of particular concern to contractors and freelancers with their own limited company as well as traditional PAYE umbrella companies that may require extra time to pay their VAT liabilities.
The data, which was collected under a Freedom of Information request, reveals that HMRC rejected over 11% of all Time To Pay requests between January and March 2010. This has risen from around 5% for the equivalent period last year.
A spokesperson from Syscap said that the majority of SMEs that had requested a special Time to Pay arrangement had done so having been let down by their customers, something which is particularly prevalent in the Construction Industry. A lack of cash flow and working capital has also been cited as a major reason for VAT payment delays.
Many small businesses are still struggling to source competitive loans to finance their short and long term operations even though the Government has once again insisted that banks are now providing an adequate flow of credit.
HMRC has come under heavy criticism for its lack of flexibility under Time To Pay, even though the number of applications has shot up at an alarming rate.
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