Interest Rate Swaps

HMRC has been lashed by a group of MPs for its treatment of businesses mis-sold interest rate swaps.

Tory MP, Guto Bebb, head of the all-party parliamentary group on swap mis-selling, said his political colleagues had “concerns” that the taxman was “rather less than sympathetic” when considering cases that included businesses mis-sold interest rate derivatives by lenders.

The Telegraph reports that the Welsh MP said that, while some banks accused of mis-selling swaps to small businesses did grant victims some form of grace and stop making payments while their cases were investigated, the taxman had been less favourable.

In a letter to Mike Eland, HMRC’s director general for enforcement and compliance, Bebb wrote:

‘It is very concerning to see that HMRC appears intent on pushing businesses that might well be eligible for redress into administration.’

A number of businesses have bemoaned the fact that HMRC has pursued tax demands against them even though they had flagged the fact that the financial burden of servicing their swap left them unable to pay.

An HMRC spokesman, said:

‘We are unable to comment on individual cases. HMRC offers a range of support to businesses in temporary financial difficulties, to help them manage their cash flow problems.’

‘Where businesses are facing genuine short term cash flow difficulties for whatever reason it is important they approach us as soon as they realise, so that we can consider early on whether time to pay is appropriate. HMRC is always happy to meet with recognised representative groups to discuss the needs of the groups they represent.’

Over 40,000 swaps are believed to have been sold to smaller businesses by banks.