Written by: Keith Tully
Published: 17th April 2019
HMRC applied to see more than 4,000 UK companies closed down over the course of 2018 and is being too aggressive in its pursuit of tax-related debts.
That’s the view of Conrad Ford from the business finance marketplace Funding Options, who feels that HMRC could be giving struggling companies a little more leeway than it currently does.
“The high number of applications to shut businesses is especially concerning, given the tough trading conditions caused by Brexit uncertainty and slowing economic growth,” Mr Conrad has said.
“HMRC continues to take a hard-line approach, despite businesses facing tough economic headwinds,” he told Accountancy Age.
The latest figures from Funding Options suggest that HMRC sought to close down 4,160 businesses in the UK last year, which is a relatively high number but represents a fall from the year before when it tried to close down closer to 4,700 businesses.
HMRC generally pursues winding up petitions against businesses that seem unable to settle their tax bills in order to have them either find a way to pay or to see them liquidated.
For businesses in financial strife this creates serious problems but can be no fault of their own if they are being taxed on money they’ve invoiced for but haven’t been paid on time, as can be the case with VAT and with corporation tax.
Mr Conrad from Funding Options advises that the tough line being taken by HMRC when it acts in pursuit of debts means that businesses and their owners need to have a clear plan of action in place to help them cope with cashflow problems that could leave them unable to pay their tax bills on time.
“In an ideal world, small businesses would be paid in good time by their clients, meaning that they have less trouble meeting their tax obligations,” he said.
“However, this is not always the case, so businesses must be prepared and know how they are going to manage their finances through the tricky periods.
“If a business is able to identify the finance options available to them as early as possible, it is less likely to run into HMRC-related difficulties if they do arise.”