Scots firms fighting £155million tax debt


By Michael MacLeod

STRUGGLING Scots businesses now owe the taxman a staggering £155million in overdue payments.

And to stop more of them going under tax chiefs are now being forced into bailing out the 8,000 or so Scots firms affected by handing them a credit crunch lifeline of more time to settle.

Glasgow companies top the tax debt league of debt, with almost 1,000 dragging their heels on tax payments totalling £26million, according to new figures released yesterday (Tuesday).

Many say they would have been forced to sack workers or go bust without the megabucks rescue.
Among the 8,380 rescued Scottish firms was an undisclosed transport firm who pleaded to HM Revenue and Customs (HMRC) for time to pay their tax debt of nearly £52,000, saying it would keep them and their suppliers afloat.

The staggering scale of Scotland’s economic problems were unveiled yesterday by the Business Payment Support Service (BPSS), some six months after Chancellor Alistair Darling announced the scheme in his Budget.

The struggle is also hitting Edinburgh’s businesses hard, with 870 owing £16million between them.

The majority owe corporation tax, VAT, PAYE, income tax and national insurance contributions.

Tax debt is hitting organisations right across the country, with 20 in Shetland owing £1million between them, while £4million is owed by 280 businesses in the Borders area.

Debt collectors agreed to give a Glasgow IT business extra time to pay their VAT bill of just over £28,000 in March, and the firm admitted they “might not have survived” without the support.

And a hotel in Dumfries and Galloway asked for time to pay their tax debt of £15,000, to prevent staff being laid off.

Stephen Timms MP, Financial Secretary to the Treasury, said: “Cashflow is critical to business survival, and that is why, as part of its commitment to help the business community through these difficult times, the Government introduced the Business Payment Support Service last year.

“It’s good to see that with 8,380 arrangements now in place the service is helping so many businesses in Scotland by providing additional cashflow.

“I urge any business facing financial difficulty in these challenging economic times to pick up the phone and speak to HMRC.

“A short phone call could assist hard working businesses who might be concerned about cashflow.”

By May 17, over 131,000 time-to-pay arrangements had been reached with businesses across the UK, worth over £2.3 billion, with the majority agreeing repayment timetables spread across three to six months.


1. Glasgow City    – 990 businesses owe £26million
2. Edinburgh  City – 870 businesses owe £16million
3. North Lanarkshire – 420 businesses owe £9million
4. Aberdeen City – 290 businesses owe £9million
5. South Lanarkshire – 560 businesses owe £8million
6. Renfrewshire    – 300 businesses owe £7million
7. Highland – 480 businesses owe £6million
8. West Lothian –    250 businesses owe £6million
9. Perth and Kinross – 360 businesses owe £5million
10. South Ayrshire – 180 businesses owe £5million