Over the course of the last year, the number of winding up petitions sought by HMRC has increased by 21%. In fact, this figure means that they are at 5 year high.
Ben Cowgill from Bolton Insolvency Experts is able to give us more detail.
“The business finance website Funding Options assessed that there were a total of 4,710 winding up petitions filed by the UK’s main tax-gathering body in the 12 months to 31 December 2017. This compares with 3,906 for the previous year and 3,485 for 2015, with winding up petitions being the means through which HMRC aims to put companies out of business in order to recover tax amounts it is owed.
Winding up petitions can swiftly lead to companies being shut down and their assets liquidated on the basis of court orders enabling HMRC to raise funds to settle outstanding debts. The recent increases in the number of winding up petitions being filed by HMRC are seen as an indication that a growing number of small businesses across the UK are struggling to meet their VAT and corporation tax bills.
A significant cause of this rising inability among small businesses to settle their tax debts is the problem of endemic late payments by bigger customers. Because VAT is calculated and billed on the basis of amounts that businesses invoice customers, rather when they are paid, there is scope for significant, damaging shortfalls when invoices go unpaid for long periods.
Another potential problem for some small businesses is that they are now no longer permitted to make payments to HMRC by credit card, payment by which has sometimes provided them with useful breathing space. If your business is behind on its tax bills, then it is probable that it will already be on HMRC’s radar.”
We can help you explore finance options for your business before HMRC comes knocking on your door. Whatever worries you have about your financially distressed company contact our team at Bolton Insolvency Experts now on 0300 303 8284 or via our Contact Us page.