I have been in business for about five years now as a marketing consultancy. When we began work I was able to round up a few local contracts with some businesses and even a few local government agencies. At the end of our first few years we were able to turn a sizeable profit and only paid close to £2,000 in Corporation taxes - something I thought for sure that I could easily pay regardless of how long I stayed in business. However, over time in, order to hold onto my biggest contracts, I ended up having to offer discounted services because of the economy whilst other project related costs continued to rise.
To compound the problem that I was facing by spending more money than was actually coming in to keep my biggest clients, I have also recently seen my ties with the local government severed due to policy changes in regards to outsourcing work. After all of this I am left with the exact same amount of corporation tax alongside profits which have fallen well below that mark. This has left me wondering, what happens if I can’t pay my corporation tax? I would like to hold onto my business if at all possible, but I just can’t see how I will be able to avoid being wound up by HMRC with such an outstanding bill.
In troubled economic times it would seem as though HMRC would be a bit more forgiving when it comes to late payments but unfortunately they are in the same distress as everyone else. If you are late paying taxes there will be a penalty of some sort from a monetary consequence right up through distraint and winding up proceedings.
The key point to keep in mind here is that it is necessary to communicate your inability to pay before the actual due date. In your case, that timeframe is going to be nine months and one day after your annual reporting date. That is the amount of time given to companies in the UK with profits below £1.5M annually.
Now then, what happens if you know that you will not have enough to make the payment on time? There are a few ways we can help you reach agreements with HMRC. Something else to consider is that corporation tax may not be your only problem. Are you having trouble paying NIC, PAYE and VAT? In fact, if you can document that you actually operated at a loss, we can assist you in getting that liability reduced or extinguished .
These will all need to be considered before a suitable plan of action can be undertaken. Real Business Rescue insolvency and business experts can advise you on solutions such as Company Voluntary Arrangements, the Time to Pay Scheme or perhaps you will simply want to wind up your company, in which case we can assist you with the iquidation process. In any case, the first step is to make that call.
Talk to one of our knowledgeable specialists before you are assessed penalties. When it comes to HMRC, we know what they are looking for and have what it takes to help you provide just that. Call us today.
12th December 2018
Small and medium-sized enterprises (SMEs) across the UK are paying increasingly large sums of money to collect amounts owed to them by their clients and customers.Read More
4th December 2018
The number of independent retailers who closed down outlets during the first half of this year reached a record high level for any comparable period.Read More