HM Revenue and Customs have been given the green light to continue the Business Payment Support Services, despite claims that it was allowing technically insolvent companies to continue trading.
Lawyers have examined the scheme and determined that it can continue, amid demands from some businesses that firms taking advantage of the scheme should be required to make their participation publicly known.
The Business Payment Support Service was set up to help businesses that are unable to pay a forthcoming PAYE or VAT bill, and allows business owners to negotiate a new payment period for their tax liabilities.
According to HMRC more than £3bn in tax payments have been deferred since the scheme was launched. HMRC has also said that it has received 90 per cent of what it had expected to be paid under newly negotiated payment plans.
Insolvency practitioners, lawyers and some businesses have expressed concern that the scheme is effectively allowing some insolvent businesses to continue trading. HMRC has so far approved 117,000 requests under the scheme.
