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HMRC moves to shut down 3,000 firms 29 June 2015

HMRC last year applied to shut down 3,000 businesses to meet unpaid tax bills, according to a new study.

Funding Options, an online business finance supermarket, has published research revealing that of the 3,000 winding up orders, HMRC was successful in closing 1,887 firms last year.

This was a four per cent rise from 1,816 in 2013.

The figures were highlighted ahead of an important upcoming deadline for small businesses.

July 31 is the date on which small businesses paying self-assessment tax must make a major payment on account. It can be a major crunch point in the cash flow calendar for SMEs.

Funding Options, which specialises in matching SMEs with appropriate finance providers, pointed out that SMEs’ financial planning is made more difficult by quirks in the system which mean that tax can be due, before the revenue it is based on is actually received.

VAT bills fall due according to the dates that invoices are issued, regardless of whether they have been paid or not.

Unincorporated businesses also have to pay 50 per cent of their tax bill for the following year in advance in July.

SMEs’ cash flow may also be hit by the unexpected late payment of a key invoice, or by a major increase in costs such as an insurance premium increase.

Conrad Ford, chief executive of Funding Options, said: “For small businesses looking nervously at the upcoming July 31 tax payment deadline, the need to get funding in place to cover the payments is now pressing.

“Funding to cover tax bills is an area we are seeing increasing demand for. It’s not something banks are keen to lend for, leaving businesses having to find other funding options.

“Unfortunately, small businesses leaders often don’t know which sort of finance is the best fit for a particular need, or who is out there to provide it.”

By Marcel LeGouais

 

 

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