Tax & admin Praseeda Nair · 28 February 2018
HMRC attempts to shut down small businesses reach five-year high
HMRC has intensified its crackdown on unpaid business taxes, as new research reveals a five-year high in winding up petitions issued to owners of small firms. According to figures received by online finance platform Funding Options, in 2017 there was a 21 per cent increase in the number of attempts made by HMRC to shut down small businesses for unpaid taxes. The 4, 710 winding up petitions issued to business owners last year represented a five-year high, after 3, 906 in 2016, and 3, 485 in 2015. When issued with a winding up petition, company owners are forced to sell their assets in order to pay off their outstanding tax liabilities. Rising numbers of winding up petitions confirm HMRC has intensified its crackdown on unpaid business taxes, with small business owners in the firing line. Further research by Funding Options recently revealed that the Treasury seized business assets from 1, 953 UK firms in 2016/17, an increase of 23 per cent on the previous tax year. Meanwhile, figures released last year by accounting group Hacker Young showed HMRC collected an additional 474m in corporation tax from small firms as a result of tax avoidance investigations in the 2016/17 tax year. Funding Options identified Britain’s late payments crisis as having exacerbated the tax troubles of small business owners. With VAT billed upon invoice, prior to receiving payment, unpaid invoices can create immediate cash flow challenges for small business owners Commenting on the figures, Funding Options founder Conrad Ford advised the tax office to loosen its grip on entrepreneurs. “HMRC should cut businesses more slack or risk making the post-Brexit environment for small businesses even worse, ” he said. “Despite reassurances it is still very difficult for businesses to get HMRC to give them ‘time to pay.’ It was also claimed that HMRC’s recent decision to refuse outstanding tax payments to be paid off on a personal credit card had removed a vital payment option for cash-strapped entrepreneurs.
ABOUT THE EXPERTPraseeda Nair
Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.