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Flybe and HMRC are refusing to disclose details of the deal by which it has been agreed that Flybe will, it is reported, delay the payment of up to £10 million of tax. Without looking for “conspiracies” this begs the question why.
Leaving aside anything the EU may say about state aid, there is nothing ostensibly wrong with HMRC agreeing effectively a time to pay arrangement and they do so on a regular basis, at least in respect of corporation and personal income tax. As a general rule they will not allow time to pay for PAYE and NIC this is simply on the basis that PAYE is not the company’s money rather tax which has been deducted from wages on behalf of employees.
It has been reported that the tax which has been delayed in Flybe’s case is Air Passenger Duty, this is the tax, which is paid by customers, collected by airlines and passed on by the airline on behalf of customers to HMRC. If this is the case Flybe is using customers tax money with the agreement of HMRC to fund its operations.
Without looking for conspiracies is this the reason why there is a veil of secrecy and this looks to be yet another example of HMRC becoming a political animal.
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