Businesses may be able to use the recession as an excuse for paying their taxes late, according to some accountants.
In a series of tribunals adjudicating disputes between the taxman and businesses, it has been clarified that firms run in a "fair and businesslike" way can reasonably claim that their taxes are late because of the circumstances of the recession.
Businesses are allowed to pay late when their ability to pay is affected by circumstances outside their control. Businesses that have taken every reasonable step to protect their income and therefore their ability to pay their tax bill, but are still unable to do so, have had their cases upheld in these tribunals.
The rulings are likely to be particularly good news for businesses in the construction industry, many of which have faced significant financial difficulty even though their firms were previously sound.
The businesses that have been successful at tribunal are those with a proven track record of efficient financial management. In order to achieve a favourable decision, a firm would also have to have paid its taxes on time in the past.
Businesses that have received fines or other penalties from the taxman for late payment, but are confident that these rulings may change their situation, should speak to HM Revenue and Customs with a view to negotiation. If this fails, an accountant will be able to advise on the best route to tribunal.
