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.
24th October 2016 The number of British companies in a financially distressed position fell during the third quarter of this year in comparison with the previous quarter and the same period of 2015.
11th October 2016 UK’s Pensions Regulator has called on the government to give her office more power to intervene in scenarios where companies are being sold while carrying large-scale pension deficits.
10th October 2016 A swathe of newly-leaked documents appear to illustrate how the Royal Bank of Scotland (RBS) systematically squeezed struggling businesses in order to boost its own revenues and profits.
5th October 2016 A total of 101 people have been made redundant following the entry of the steel contracting business AIC Steel Limited into administration in recent days.
13th September 2016 The frequency with which HM Revenue & Customs (HMRC) is stepping in to seize assets of companies who are heavily in debt increased sharply over the past year.
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