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Positive Pages
 
I'm not even going to talk about the doom and gloom brigade, these pages are for us to air and share positive views and ideas. All instant print industry folk, printers and suppliers alike, are invited to form a positive thinking club. Negative gonads need not apply.

We are re-inventing the three Rs and hope to spread optimism through these pages delivered to the nations 6000+ frontline printers. Positive vibes by our 36,000 readers will encourage our 8 million customer base to 'Carry on Marketing'. To some this may seem farcical but we have real influence, and we must lead by example in using our print products to sell.

Print loads more of your own flyers, sales letters and posters. Get to know your customers and communicate with variable data. If you don't have the know how, the software or necessary print kit, we will help you source the service without even having to invest in-house.

Back to those 3 Rs; firstly we must recognise the recession/opportunity, secondly, embrace the reality/opportunity and finally plan our recovery/opportunity. The reward will be seeing our customers prosper and yes there are definitely more than 3Rs here but if we all aim to over deliver then our customers will not only survive but be appreciative of those who proved to be on their side during a challenging period.

The odd free poster or extra couple of flyers to help promote your customers will go a long way to encouraging an upturn in the economy. We create sales every day through our design and print, all we have to do is more.

If we all use the word, upturn, eventually it will become a reality and after all copy shops have historically been the business trend setters.


Please share your best practices with CSN to cascade out to the readership, we are all in the same boat and will benefit from unity. This new 'Talkin It Up' feature will run until the next generation of yuppies with unlimited plastic return to our counters. When seeking motivation look out for our new friend, Upturn Girl, she knows what she wants and is prepared to go for it. There's inspiration for you.




Real scenario obstructions to the above will also be dealt with here in your new CSN Positive Pages, as in real life, pressures of business will knock our entrepreneurial spirit. A problem shared can help us all to remain constructive. Our first project received from the readership is in response to questions about mounting VAT and tax bills, make yourself a hot drink and find a comfy chair and read this report from Paula Tallon, who is a partner at BDO Stoy Hayward LLP, chartered accountants.


The Business Payment Support Service - A Friend In Need?
Paula Tallon

Are you a business that is suffering a cash flow problem? Are you having problems borrowing in order to pay bills, including your taxes such as VAT and Corporation Tax? If so, then HM Revenue & Customs (HMRC) may have a solution for you.

What is the BPSS?
Businesses that are feeling the effects of the economic downturn will have been relieved to hear that HMRC has set up a 'Business Payment Support Service' (BPSS). This service is designed to help businesses pay their income tax, corporation tax, national insurance or VAT liabilities by allowing payment over a period that is "as long as they need".

Businesses have always been able to ask HMRC for more time to pay, but the BPSS promises to make this easier by speeding up the process, relaxing the conditions and allowing a longer payment period. HMRC says it will discuss options tailored to the business's needs and try to agree an "affordable payment timetable".

What do you need to do?
To take advantage of this opportunity, a business (or its appointed tax adviser) should first check the guidance available on the HMRC website (www.hmrc.gov.uk/pbr2008/business-payment.htm). If this doesn't answer the questions sufficiently, they can contact the BPSS helpline well before the date on which the tax becomes payable. The number to ring is 0845 302 1435, and the service is available Monday - Friday from 8.00am to 8.00pm and on Saturday and Sunday from 8.00am to 4.00pm. The HMRC adviser will only ask for the information they need to make a decision such as the business's tax reference number, details of the tax liability, and basic information on the business's cash flow (i.e. income and outgoings) and a proposed payment plan. Where possible, they will then arrange to collect these by direct debit payments.

Will the helpline be able to give me an immediate answer on all my tax debts?
HMRC says that in most cases it should be able to give a decision in about 10 minutes. Larger or more complicated debts will need a longer, more detailed discussion. This is because there will be instances though - for example where there are a number of different debts - when helpline staff will need to obtain information and advice from a different HMRC office. In such cases they will take down the caller's details and that office will aim to call them back within 4 working days or sooner.

According to HMRC, from 24 November to 10 December over 14000 calls received; over 5800 time to pay arrangements agreed on the spot, totalling over £103m; over 2400 cases referred for further consideration, totalling over £153m; and over 5500 general enquiries.

What would HMRC not consider to be a reasonable time to pay?
HMRCs approach is to consider all requests and in some cases they may need to ask more questions to establish what is reasonable in the circumstances. In some cases a request may not be reasonable if it does not start to address the size of the debt and the debt is continuing to increase.

How much tax can be paid in installments?
Decisions will be made on a case-by-case basis and they will consider all requests regardless of the sums. Obviously larger debt and those that are more complicated may require that they have a more detailed discussion.

Will HMRC treat businesses with smaller debts any differently to those with larger debts?
They will treat all debts on their facts but they expect that they will be able to reach an agreement with minimal documentation for most smaller debts.

What the BPSS does not cover
The BPSS is for new enquiries only. If an HMRC office has already contacted a business about an overdue payment, the business should call that office to discuss further payment options. Similarly, if a business has an existing payment arrangement but is now concerned that it may not be able to meet the terms, it should discuss this with the HMRC office that agreed the arrangement.

However, if a business receives a warning letter about court action and cannot get through to the office that sent it, it can call the BPSS to explain the situation.

Unfortunately, HMRC will not repay amounts that have already been paid and agree a new arrangement for these, even if the business is experiencing difficulties after paying the tax.

What about interest and other charges?
No additional charge will be made for agreeing an arrangement under the BPSS, and no late payment surcharges will be made for amounts included in an arrangement. Interest will continue to be charged in those cases where it applies. However, the main rate of interest for late income tax and corporation payments was reduced from 6.5 per cent to 5.5 per cent on 6 December 2008, and a further reduction may soon be made following the recent cut in the base rate from 3 per cent to 2 per cent.

What capacity does HMRC have to deliver this service?
The helpline alone will be able to handle up to 3000 calls an hour. As you would expect, the busiest times for their help lines are generally 8:30-10:30 and 12:30-14:00.

Any particular points to watch?
Yes - there are some things you need to note.

Firstly, some late VAT payments give rise to a 'default surcharge', but HMRC says that any such charge will be cancelled where the agreement was reached after the introduction of the BPSS. Businesses will need to check that this does indeed happen.

Secondly, contractors and subcontractors in the construction industry will need to watch that any agreed late payments of Construction Industry Scheme (CIS) tax under the BPSS facility are not counted as failures for the purposes of the annual compliance test, which could result in a potentially disastrous loss of gross payment status. HMRC says that if a subcontractor enters into a BPSS arrangement in relation to CIS tax before payment becomes due; they are unlikely to lose their gross payment status. If, despite having come to such an agreement, they receive a letter advising them that HMRC has cancelled their gross payment status, they should immediately appeal, explaining that a BPSS arrangement is in place. In most cases their gross payment status will be restored, unless there were other unrelated failure reasons.

Conclusion
In a recession, it is more than ever the case that 'every little helps', and cash flow is priority. At a time when borrowing is difficult, businesses should certainly take advantage of this opportunity to finance their tax payments at a very reasonable rate.

Box: VAT on imports
In a similar vein, importers can take advantage of an existing HMRC facility that can help businesses to counter the effects of the credit crunch and the falling pound. Importers and their advisers should look again at the Simplified Import VAT Accounting (SIVA) scheme, which can reduce borrowing requirements and improve cash flow.

What is SIVA?
SIVA is a scheme that enables UK VAT-registered importers to defer payment of import VAT without having to provide a guarantee.

What are the main benefits?
VAT on goods that are imported into the UK is normally payable at the time of importation unless a particular relief applies. Under the SIVA scheme, payment is deferred by up to 45 days - to the 15th day of the following calendar month. The 'no security' feature avoids the cost of servicing a bank guarantee.

Who qualifies for SIVA?
Businesses that meet all of the following conditions:
• Registered for VAT for at least 3 years.
• Able to demonstrate a good compliance history and payment record.
• Able to pay all amounts deferred under the SIVA scheme.
• Able to demonstrate a 12-month international trading record, with good compliance.

A particular point here is that a business which has recently re-registered for VAT following a company restructuring or change of ownership may not qualify under the three-year rule. However, it may still obtain SIVA approval if it can provide additional information to enable HMRC to assess its eligibility.

Any particular conditions?
Payment of the deferred import VAT must be made by direct debit. A limit is placed on the total amount that can be deferred each month, and if this is exceeded, any additional amounts must be paid immediately.
Download form at:
 http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_PROD_009625

Paula Tallon
paula.tallon@bdo.co.uk