Monday, October 14, 2013

HMRC – a nice group of people who will give you a discount for early payment, possibly!

A client has recently had some success in getting a discount from HMRC in respect of the early payment of Corporation Tax in an MVL.  The client applied the formula in rule 11.13, which deals with debts payable at a future time, to pay a reduced amount of Corporation Tax to HMRC since he was paying them in advance of the due date for payment.  You should consider giving it a try, although I would restrict it only to when you consider the amount of the discount to be sufficiently large to justify doing so given that you might encounter some resistance from HMRC to such an approach and have to spend time and effort arguing with them.  It would certainly be worth sending a covering letter with the payment indicating why you have paid a lower amount than that due for the outstanding Corporation Tax. 

Whilst there is no guarantee that this will necessarily work, the instructions to the local tax office to accept the discounted payment from our client came from the Insolvency Claims Handling Unit in Longbenton.

Of course, it may be that you have been doing this all the time and we just have not noticed before, but it is the first we have heard of it and we thought you should be told.