HMRC looks to shut down thousands of businesses due to unpaid tax bills
HMRC applied to shut down 3,000 businesses last year to meet unpaid tax bills, according to research released today by online finance market Funding Options.
The tax authority was successful in gaining court orders to wind up 1,887 businesses over their tax debts, a four per cent rise from 2013’s 1,816.
Once a business is wound-up, HMRC sells off its assets in order to cover the unpaid tax bills.
The figures highlight the potential consequences if businesses’ immediate cash flow position makes them unable to secure alternative finance to cover their tax bills, Funding Options said.
“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,” said Funding Options boss Conrad Ford.
“Although HMRC does attempt to resolve issues with businesses, it can only wait so long if arrears are building. SMEs need to plan ahead to identify ways that they can manage their cash flow more effectively, such as alternative finance to spread the cost and mitigate the risk of major financial shocks such as bad debts or sudden cost hikes.”