Written by: Keith Tully
Date: Friday 23rd February, 2018
The number of winding up petitions sought by HMRC over the course of last year increased by 21 per cent to reach a five-year high.
Figures from the business finance website Funding Options show that there were a total of 4,710 winding up petitions filed by the UK’s main tax-gathering body in the 12 months to the end of December 2017.
That number compares with 3,906 for the previous year and 3,485 for 2015, with winding up petitions being the means through which HMRC aims to put companies out of business in order to recover tax amounts it is owed.
Winding up petitions can lead swiftly to companies being closed down and having their assets liquidated on the basis of court orders so that HMRC can raise funds to settle outstanding tax-related debts.
The recent rises in the number of winding up petitions being filed by HMRC are being taken as a sign that a growing number of small businesses across the UK are finding it difficult or impossible to cover their VAT and corporation tax bills.
According to the assessment of Funding Options, a major cause of this rising inability among small businesses to settle their tax debts is the problem of “endemic late payments by bigger customers”.
The company has pointed out that because VAT is calculated and billed on the basis of amounts that businesses invoice their customers, there is scope for significant and damaging shortfalls when their invoices go unpaid for extended periods.
Another potential problem for some small business bosses is that they are now no longer allowed to make payments to HMRC via credit cards as a result of recent rule changes.
“HMRC should cut businesses more slack or risk making the post-Brexit environment for small businesses even worse,” says Conrad Ford, the founder of Funding Options.
“Despite reassurances it is still very difficult for businesses to get HMRC to give them ‘time to pay.’
“Businesses behind on their tax bills will already be on HMRC's radar, so they must get finance in place before HMRC comes knocking on their door.”
15th March 2018 Conviviality, the owner of the two major drinks retail operations Bargain Booze and Wine Rack, has revealed that it recently identified an unexpected £30 million tax bill for liabilities owed to HMRC.
13th March 2018 After moving the main budget to the autumn with the intention of giving businesses more certainty throughout the year, Philip Hammond promised a brief affair when he addressed the House of Commons
12th March 2018 Experts Raise Concerns Over ‘Lack of Transparency’ in Pre-Pack Administration Deals
8th March 2018 The clothing retailer New Look is planning to shed close to 1,000 jobs and close 60 of its UK stores as bosses attempt to rescue and restructure the ailing high street operation.
28th February 2018 Financial crises at Maplin and Toys R Us have promoted both retailers to call in administrators within a matter of hours of each other.
Every day we help companies just like yours turn things around against seemingly impossible odds, regardless of your situation we can help. Find your nearest office today.