Following the release of a study showing that SME owners and managers fear their current businesses may close due to problems paying tax bills and have already missed deadlines, Todd Davidson, founder and MD of Purbeck Personal Guarantee Insurance, shares his tips on getting your tax obligations in order.
The study snapshot by finance provider, Premium Credit:
Study of SME owners and managers who fear tax payment problems could see them close.
39% have missed up to four tax bill deadlines in the past three years.
55% have been late with filing a VAT or Corporation Tax return in the past three years.
24% have in the past worked for firms that closed or went into liquidation because of tax bills.
Todd’s five tips:
1. Engage with HMRC before the deadline, not after.
Firstly, engage with HMRC. They are far more flexible with businesses that come forward early, and a Time to Pay arrangement agreed in advance avoids escalating penalties.
2. Don’t let Time to Pay become the plan.
If you’re stacking one arrangement on top of another, that’s the moment to sit down with an adviser and look at the underlying cash flow, pricing and legacy debt, not just the next instalment.
3. Ring-fence tax as money comes in.Setting VAT and a Corporation Tax provision aside in a separate account turns a quarterly shock into a routine cost.
4. Review pandemic-era debt properly.
Restructuring or consolidating legacy COVID borrowing on better terms can free up the headroom needed to meet tax bills without panic borrowing at high rates.
5. Get help early. A tax debt problem handled early is almost always manageable; one handled late rarely is.
Following the release of a study showing that SME owners and managers fear their current businesses may close due to problems paying tax bills and have already missed deadlines, Todd Davidson, founder and MD of Purbeck Personal Guarantee Insurance, shares his tips on getting your tax obligations in order.
