Is The Taxman Killing Small Businesses?

Any failure on your behalf to pay your tax or VAT liabilities is taken extremely seriously by Her Majesty’s Revenue and Customs.

HMRC try not to give preferential treatment to companies who are struggling to pay their taxes. Therefore, it makes things very difficult for businesses that do not have the finances to pay HMRC.

If you seek professional advice from an Insolvency Auditor, they will be able to present the most effective methods by which you should negotiate with the taxman.

Her Majesty’s Revenue and Custom’s does not act like a traditional creditor, because it doesn’t provide your business with credit and doesn’t ask you to pay before you have accrued the tax. However, this can work against you as HMRC usually takes very aggressive action to recover the money owed.

Although Her Majesty’s Revenue and Customs department claims to have payment plans available for businesses suffering cash flow problems, the reality is that small business owners can find it very hard to negotiate with the authorities. In extreme cases some businesses can be forced into liquidation.

This drastic effect on the business community can leave some small businesses at the mercy of tax and VAT collectors if they have fallen behind on their payments. Small business owners may not realise that there is help available and should get in touch with their local insolvency auditor, who can try to help them negotiate and reach a deal with the taxman.

Moe Nawaz, Insolvency Auditor and author of “Insolvency Survival Guide For Businesses”, believes small businesses will not escape the sting of Government cutbacks, as efforts to reduce the UK deficit trickles down through the economy to many private enterprises.

“We are beginning to see more business owners that are considering liquidation of their businesses because they have not been able to negotiate with HMRC for a repayment plans. This being the case, HMRC and the tax payer both lose out because of a handful of enforcement officers would rather send the work out to collection agencies rather than arrange a repayment plan,” he said.

“Once the authorities know a company has sought advice from an insolvency auditor, they appreciate the chance of liquidation and that the tax or VAT amount may not get paid at all. Therefore, it is in the taxman’s interest to strike a deal to reduce the debt and pay the balance over time, or arrange a CVA (Company Voluntary Agreement) subject to creditor agreement,” he added.

Businesses are finding life increasingly hard in this current economic crisis. This could lead to stresses spreading into their own personal life and cause problems both in and out of the workplace. So, seek help and advice from an Insolvency expert.

To find out more, or to seek advice visit: www.ukadvice.com or call 0800240800.