Cashflow and the payment of tax
25th November 2022It has recently been reported that the tax debt owing to HMRC as at 30 September 2022 stands at £46.9 million, and they are taking positive action to recover this from both individuals and business.
The profession has certainly seen a much more proactive approach from HMRC, and given the financial pressures on all, it is important to take the appropriate steps to avoid problems down the line. They (HMRC) have commented that “the days of the bank of HMRC are numbered”.
So we must all expect to see an increase in debt management activity.
HMRC generally take a 5 step approach –
- Step 1 – Issue the statement of account
- Step 2 – Issuing letters and phoning clients
- Step 3 – A visit from a field force officer
- Step 4 – Escalation to the debt management department
- Step 5 – Action resulting in bankruptcy / Insolvency
It is possible to negotiate time to pay arrangements with HMRC, but in most cases expect to pay 30% to 50% of the debt up front.
As ever we have experience of all of the matters which you may come across, so ensure that you speak to us at your earliest opportunity.
Disclaimer - All information in this post was correct at time of writing.