23 March 2011
From April 2012, HM Revenue & Customs will be able to require a security from employers where it thinks there is serious risk that tax due under PAYE or NIC will go unpaid.
Comments Eddie Stanton, tax partner in our Manchester office:
“This could become a license for HMRC to make a grab for the cash and assets of businesses that are in difficulty in an effort to put themselves ahead of other creditors. If HMRC are allowed to take security over assets, then a business that needs to raise more cash will not be able to use those assets to secure additional bank lending."
“HMRC has never been comfortable with the idea that it should rank alongside other creditors. Some will see this as an effort to elbow its way ahead of other creditors and have more rights to grab assets if a business is running into difficulties."
“Over the last year HMRC have become more aggressive in their debt collection tactics, seeking to put more businesses into wind-up in order to access their assets. This seems like a expansion of that trend.”
“It is an aggressive practice that HM Customs & Excise used to use to claw back VAT.”
“Businesses that are already on Time to Pay will find it even harder because they will already be up against the wall.”
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From 6 April 2012 HMRC will be able to ask employers to pay a financial security where it thinks there is serious risk that the business won’t pay over their PAYE tax deductions or National Insurance contributions (NICs) on time.
