11 January 2010
Titles that covered this article include: The Guardian 11 January 2010.
- HMRC is issuing 43% of all petitions to wind up companies to recover tax owed to it
- Businesses should put a ‘time to pay’ agreement in place before they fall behind payments
Despite the ‘time to pay’ scheme in place, HM Revenue & Customs (HMRC) continues to be the number one creditor to request the winding up of companies to recover debts owed to it, shows research* from UHY Hacker Young, the national accounting group.
According to the research by UHY Hacker Young, HMRC submitted 43% of all petitions for the past 6 months to wind-up companies to recover debt. It shows that despite the Government’s sympathetic stance towards businesses during the recession, HMRC’s priority remains to maximise debt recovery.
Nick Hancock Partner at UHY Hacker Young comments: “If a business has unpaid tax and does not have a ‘time to pay’ agreement in place, HMRC is still prepared to pull the plug on that business to recover what it is owed.”
“The most important message for businesses is that they cannot allow themselves to fall behind with tax payments and then hope for HMRC’s good will. They have to open up dialogue with HMRC as soon as they foresee cash flow problems and negotiate a realistic ‘time to pay’ agreement.”
UHY Hacker Young adds that businesses that have cash flow problems should make the most of the ‘time to pay’ scheme while it is still available as HMRC is expected to make access to the scheme tougher.
Says Nick Hancock: “Other major creditors, such as banks, have come under political pressure to go easy on debtors, yet for all HMRC’s good intentions, it still accounts for a large chunk of winding-up petitions.
“If this is HMRC in “soft touch” mode, businesses will be concerned about HMRC turning the screws after the Election as it strives to improve the public finances.”
“Company Directors who can’t come to a workable agreement with the taxman, or who break the terms of an agreement, will find that HMRC will be very quick to push the button on their business.”
* Research based on a sample of over 650 petitions
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