I operate a small landscaping business in the North West of England and with this bad economy I have not been able to pay my taxes on time. There are only 15 employees currently working for my company and although I am managing to keep up with PAYE taxes and NIC, I have not been able to pay VAT timely.
Landscaping services are only a portion of the company as we also sell fertiliser, grass seed, and basic lawn and garden equipment as well as a small selection of garden furniture. Unfortunately, I can’t pay my VAT bill, what are my options? My company isn’t actually ready to be bankrupt and this is the only real bill I have that is late. I believe this is only temporary and that business will pick up so I don’t want to be bankrupt because VAT isn’t paid. What should I do to keep the bailiff away from my door?
The first thing to be aware of is that HMRC will pursue you if you are continually late on your taxes! They, of course, want their money but that is only a portion of what they will look at. As you probably know, it is crucial to convince them that you are not insolvent and that you are not involved in wrongful trading. Racking up bills that you have no intention or wherewithal to pay is a serious matter in the UK.
There are several options you have if you act quickly. Some involve formal court proceedings whilst others may be accomplished informally, out of court. If there is a way to inject capital into your business, you may wish to consider that first. Check out our section on business finance and funding to see if any of those methods are suitable for your needs. It is also possible to undergo a CVA (Company Voluntary Arrangement) through the courts or perhaps HMRC could be contacted to look into their Time to Pay scheme.
In any event, the team at Real Business Rescue would be happy to discuss other alternatives with you at a free-of-charge initial consultation. The key point here is to act quickly to show Her Majesty’s Revenue and Customs that your intentions are honourable and that you are making every effort to act responsibly. To delay would be the gravest mistake of all.
29th April 2016 The UK’s largest independent printing company has called in administrators after failing to overcome cash flow problems in recent weeks.
25th April 2016 Thousands of employees of the historic UK retail business British Home Stores (BHS) have been informed that the company is set to enter administration.
22nd April 2016 HM Revenue & Customs (HMRC) is being urged to make changes to guidance relating to its flat rate VAT schemes for small and medium-sized enterprises (SMEs).
21st April 2016 Having to pay staff no less than the new National Living Wage will leave many thousands of British businesses facing the prospect of financial peril.
14th April 2016 HM Revenue & Customs (HMRC) is increasingly focussing its enquiries in relation to corporation tax issues in the UK on the affairs of small and medium-sized enterprises (SMEs).
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