The number of businesses that have had assets seized by HMRC has more than doubled in the past year, according to a recent study.
Funding Options, a finance matchmaker, found that businesses who had assets seized to settle outstanding debts increased from 649 for the year ending March 2015, to 1,592 for the same period ending in 2016 – a total increase of 145 percent.
Under the ‘taking control of goods’ regulations, HMRC can seize assets in order to settle debts from businesses that have been unable to pay their overdue tax bills. The assets seized are then sold at auction to recover the debt.
Funding Options said that although this tactic is often a last resort for the tax authority, the growing number of these cases suggests that HMRC is cracking down and using increasingly aggressive methods to recover overdue tax.
Research also found that the amount of debt these assets were seized to cover amounted to £43m in the last year, a dramatic increase of 175 percent on last year’s figure of £15m.
Conrad Ford, chief executive of Funding Options, said: “Often small business owners aren’t aware of the many options available to them outside traditional bank lending.
“Peer-to-peer lending, crowdfunding, asset finance and invoice finance as well as specialist products designed to finance tax bills can all be viable routes for SMEs to access the capital they need.”