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HMRC most likely to wind up firms

freelancesupermarket.com newsroom

RSS 12 January 2010
It seems that the recent financial crisis has not convinced the government and HMRC to have sympathy with companies in difficulties.

New figures just released show that they are responsible for nearly half of the petitions submitted for the closure of companies. These figures obtained by accountancy firm UHY Hacker Young showed that HMRC had lodged 43 per cent of all 'wind-up' positions over the past six months.

UHY Hacker Young commented that although other creditor groups such as the banks have been asked by ministers to go easy on debtors, HMRC's main priority remains to maximise debt recovery.  Companies having difficulty meeting their payments are advised to apply for the Time to Pay scheme, but be warned, HMRC does not look kindly on businesses that are already in arrears.

UHY Hacker Young's Nick Hancock stated: "Businesses will be concerned about HMRC turning the screws after the election as it strives to improve the public finances. If a business has unpaid tax and does not have a 'Time to Pay' agreement in place, HMRC is still prepared to pull the plug on that business to recover what is owed."

He continued: "The most important message for businesses is that they cannot allow themselves to fall behind with tax payments and then hope for HMRC's good will."

Hancock concluded: "They have to open up a dialogue with HMRC as soon as they foresee cash flow problems and negotiate a realistic 'Time to Pay' agreement."

The problem is likely to get worse after the general election as HMRC turns the screws to restore public finances. If you think that your business is going to have trouble meeting your tax liabilities, it's time to act now. Applying well in advance for a 'Time to Pay' agreement may be the only way to keep your business afloat.

© 2009 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Wind It Up by wEnDaLicious

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