Rachael Singh, Accountancy Age, Tuesday 6 July 2010 at 09:19:00

Turnaround Management Association director Tyrone Courtman says businessesare finding HMRC's Time to Pay tax deferral scheme hard to keep up with

Companies in Time to Pay (TTP) arrangements are finding it difficult to stickto them and obtain credit according to the Turnaround Management Association(TMA).

TMA director and head of business recovery at Cooper Parry, Tyrone Courtman,believes many of the 300,000 businesses who benefitted from HMRC's deferred taxscheme were "finding it difficult to adhere to".

Courtman warned growth remained "critically" weak in the private sector dueto a shortage of credit - forcing businesses to seek insolvency processes as analternative.

"Many businesses are seeing their recovery plans thwarted with threats ofbankruptcy and are having to resort to Company Voluntary Arrangements [aninsolvency process] just as they are pulling through, because as increasedactivity places demands for increased working capital, they have neither thereserves nor their funders the appetite to finance it," he said.

Courtman warned chancellor George Osborne that while enacting Britain'scontrolling inflation and making public sector cuts, he still needed to find abalance between spending reduction and the recovery of the private sector.

"If the private sector is to deliver the two million new jobs the economyneeds then the chancellor needs to proceed with extreme caution. Cuts of 40% indepartmental budgets would have a severe knock-on effect on the private sector,and the Treasury needs to be extremely conscious of the risk of throwing thebaby out with the bathwater," he said.

Further reading:

Taxdenting UK's top city status: CBI/KPMG survey

Budget2010: Warning as Time to Pay scheme is extended

HMRCrejects 6000 time-to-pay pleas