Data released by HMRC on Monday shows that the number of UK companies which HMRC sought to have wound up, due to failure to pay tax, increased from 3,367 in tax year 2011 to 5,302 in tax year 2012 (an increase of 57%).
Why?
Wilkins Kennedy LLP are of the view that HMRC is being pressurised by the government to take a more hardline stance (in order to squeeze more tax revenue out of the system).
Anthony Cork, a partner at Wilkins Kennedy, is quoted by Tax-News:
"When businesses run into trouble, often one of the first things they do is try to delay tax payments to help manage their cashflow. This puts businesses on a collision course with HMRC.Cork is of the view that HMRC could intervene earlier to help businesses manage their tax bills:
HMRC does not like being used as a 'lender of first resort,' and is keen to dispel the image that it is a soft touch or that the unauthorised late payment of taxes is an acceptable way for a business to resolve cash flow problems."
"HMRC often lets tax debts spiral out of control, which leaves it with little choice but to resort to winding-up petitions to recover large amounts of unpaid taxes."Cork also noted that it is now harder to receive help from HMRC's Time to Pay scheme.
Is this the case I wonder?
The fact that the companies were having problems with paying their taxes indicates that the businesses themselves were in trouble.
Was this trouble a "temporary blip" that could be resolved if the company was given more time, or was this a symptom of an underlying long term problem with the business?
It is not HMRC's role to act as a lender of last resort.
Businesses fail for many reasons, it is always easy to blame banks and creditors (eg HMRC) for pushing them under but it is not always right to lay the blame at the door of banks and creditors.
I would welcome input, views and comments from SME's, loyal readers etc which have asked for help from HMRC wrt delaying tax payment etc.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
What is Solar Tax Investigation Insurance?
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
To find out more, please use this link Solar Tax Investigation Insurance
Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.
Click the link to read about: Tax Investigation for Dummies
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"
Damned if they do, damned if they don't. Not an easy call for HMRC although their IT should be more than capable of flagging rising debt, especially when compared to accounts figures available.
ReplyDeleteThe tax due has usually already been collected by the company in default, unless it is a bad debt of some form so legally etc should be remitted to HMRC.
Of course if they decide to wind-up, don't they then have a problem with no longer being a preferential creditor and have to join the other creditors?
Don't let the debt creep above a reasonable amount before doing anything and remember you can't protect it if you can't collect it!