Business payment support service - May 2009

The Business Payment Support Service (BPSS) was set up by HMRC to help businesses affected by the current economic conditions. The service covers all business taxes and will also deal with non-business taxpayers. Authorised agents can use the service on behalf of clients.

For taxpayers who are considering using the BPSS:

  • once payment terms are agreed, HMRC will not charge late payment surcharges on payments included in the arrangement, although interest will continue to be charged where it applies
  • the BPSS can only deal with new requests for time to pay, not with existing debts where the taxpayer is already in contact with another part of HMRC
  • It will only offer time to pay to viable businesses
  • HMRC will have three main questions: What do you need to pay at the end of the month? Why can't you pay it then? When will you be able to pay?
  • HMRC ask callers to have the following information to hand: the tax reference number; details of the tax that you have, or will have, trouble paying: basic details of your business's income and outgoings. Callers should consider what sort of payment terms they could sensibly manage

For contractors in the construction industry, HMRC has said that setting up a time to pay arrangement will not cause them to lose their gross payment status, provided they approach HMRC before the tax falls due.

Annual Rise in Compensation Limits

Details of the annual rise from 1 February 2009 include:

  • the limit that employment tribunals apply when calculating compensatory awards for unfair dismissal will rise from £63,000 to £66,200
  • the minimum basic award for unfair Dismissal will rise from £4,400 to £4,700
  • redundancy pay (calculated in accordance with the amount of years worked as well as the employee's age) will rise from £330 to £350 for the maximum amount of a 'week's' pay. This means the maximum bill an employer might face for statutory redundancy pay will rise from £9,900 to £10,500
  • the limit on the amount of guarantee payment payable to an employee for any day will rise from £20.40 to £21.50

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