It is
public knowledge that the level of
HMRC debts has escalated to
unprecedented levels since the start
of the credit crisis and the
subsequent recession. It is reported
by the BBC and other organisations
that uncollected HM Revenue and
Customs debts in the last financial
year rose to an excess of £42
billion!Most analysts
agree that the UK economic outlook
and the outlook for the region’s
businesses remain challenging across
the board and, in some sectors, is
very bleak. The continued
reluctance, despite political
pressure, of the banks to extend
funding lines, particularly to SME
business will result in continuing
pressure in meeting regular ongoing
PAYE, NI, VAT, corporation tax and
other tax obligations to the
Revenue. Very often tax obligations
are seen as an “under the counter”
additional source of working
capital, often borne out of
necessity as businesses struggle to
collect cash and to meet other
pressing obligations. However, the
warning signs are continuing to
appear that the perceived lax
attitude of HMRC to collections will
be replaced by a tougher regime.
This will range from VAT and PAYE/NI
security bonds for businesses which
have a poor compliance record,
lightning visits by case officers to
make immediate business assessments
and the streamlining of enforcement
procedures to ensure that
non-compliant businesses are
identified and pursued more quickly.
It is important that directors are
aware that the trade off for HMRC
previously allowing the wider use of
time to pay arrangements and
forbearance in pursuing arrears is a
greater focus on the conduct of the
directors of the business should it
fail. There is already a significant
increase in the number of director
disqualification applications where
it is perceived that the company was
being traded to the detriment of
crown creditors. There are also
signs of an increased number of
actions by HMRC seeking to recover
arrears of PAYE from individual
directors of companies. HMRC has
recently announced plans to seize an
additional £4 billion in revenue in
2010/2011 by adopting a more
aggressive strategy which may well
result in a significant number of
investigations into both compliant
and non-compliant businesses.
If you are concerned about the
prospects for your business and if a
business is non-complaint with its
dealings with HMRC, it is essential
that you take professional advice to
mitigate the risk of personal
liability or disqualification
action. For further information
please contact
Andrew Livesey. |
