Assets seized by HMRC are often sold at “fire sale” price
The HMRC is aggressively? seizing more assets from UK businesses struggling to pay their tax bills in cash, as experts warn against a heavy-handedapproach on smaller firms.
According to new figures from online business finance marketplace Funding Options, there has been a 45% jump in the number of businesses having their assets seized to 2, 833 in the last 12 months.
That is up from 1, 953 the year before.
Funding Options said that the HMRC regularly “takes control of goods” from businesses in order to settle tax bills that businesses do not have the cash to pay.
Under the rules, HMRC is allowed to seize even business critical assets such as IT systems or machinery, the removal of which could lead to the closure of the business.
The study found that 69.7m was raised by HMRC from the sale of the assets it seized last year, up 67% from 41.6m in the previous year.
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Funding Options suggested that the figures showed that the HMRC is ramping up the pressure? on businesses for not paying tax on time.
hMRC’s increasingly aggressive debt collection policy comes at a time when businesses are already facing other major potential risks such as Brexit and rising interest rates, Funding Options said.
assets that are seized by HMRC are often sold at fire sale prices, which means that HMRC is often unable to recoup the tax owed by these asset sales.”
“Instead of selling these assets at auction, HMRC should investigate other methods of recouping the tax.
Funding Options suggested that one way of doing this would be to give businesses more generous time to pay, which is an HMRC scheme that allows businesses to spread tax payments over a period of time.
hMRC is jeopardising the future of these businesses by removing their assets. There are often genuine reasons why these firms arent able to pay their tax bills on time, such as cash flow issues stemming from late payments from clients, said Conrad Ford, chief executive of Funding Options.
there may be a better way for HMRC to recover the tax than removing a business’s vital assets. Cash flow difficulties that mean a business cannot settle its tax bills should not spell the end for them.
“Businesses should be aware of all the finance options available that can help them through financial difficulties, which can be arranged quickly and efficiently, including specific finance products to pay tax bills.
__________________________________________________________________________________ HMRC publishes VAT guidance in the event of no-deal BrexitHMRC has released guidelines to make business owners aware of both immediate and long-term changes if no trade agreement is struck with the EU.
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HMRC publishes VAT guidance in the event of no-deal Brexit
HMRC has released guidelines to make business owners aware of both immediate and long-term changes if no trade agreement is struck with the EU.
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