In November 2008, HMRC introduced the BPSS to meet the needs of all businesses and individuals affected by the current economic climate. During his Budget speech, Alistair Darling announced that, as UK economic conditions remain fragile, the BPSS remains available and will continue to be in place for as long as it is needed.

HMRC had originally confirmed that there have been no changes to their policy in this area and that all requests are assessed on the same basis as when the service was first introduced. However, from the beginning of April, businesses seeking time to pay arrangements on tax debts of £1m or more must provide an Independent Business Review (IBR) in support of their request.

Typically, an IBR will include a review of a number of important areas, including: current trading and financial position; profit and cash flow projections; business and financial strategies; management systems; and funding and banking arrangements.

The IBR must be carried out by a qualified professional advisor such as an accountancy firm or an insolvency practitioner and be paid for by the business making the request. HMRC recognise that this will be an additional cost for the business involved; however, they envisage that in many cases businesses will have already implemented a similar review, for example, in discussions with their banks.

For further information on BPSS, please refer here.