Tax Arrears
If your business has run up tax arrears do not delay – you must seek professional advice as soon as possible.
. Everyone must pay tax and if you are in arrears it could have serious implications for your business.
As a business owner you are responsible for paying a number of taxes, and allowing these to fall into arrears can have serious consequences. The taxes you may have to pay include PAYE, VAT and Corporation Tax. HMRC (Her Majesty’s Revenue & Customs, formerly HM Customs & Excise and the Inland Revenue) imposes strict deadlines for the payment of taxes, with penalties imposed if those deadlines are missed. Ignoring deadlines and continued failure to make payments, and therefore an escalation of the tax arrears, will only compound the problem.
How do tax arrears mount up?
Tax arrears start to mount up when an HMRC deadline is missed. In business, cash flow is of prime importance. So when your employees’ wages are due, your suppliers are hounding you for payment of outstanding invoices, and money owed to you hasn’t arrived, its easy to use money you know you really should set aside for tax – after all, HMRC’s deadline is months away…
However, unless your cash flow situation is resolved, this system of robbing Peter to pay Paul can only end one way – with an HMRC payment deadline looming and not enough money in the bank to meet it. And your tax affairs in arrears.
How to deal with tax arrears
Clearly burying your head in the sand is not going to make the problem of tax arrears go away. HMRC expects payment to be made and will pursue those whose taxes are in arrears.
The sooner you act, the better. If you have a profitable business and have allowed tax arrears to mount up due to cash flow problems, your business may be at risk if you do not deal with the issue promptly. If you act early, you may be given an opportunity to “trade your way out” of debt, allowing you pay off your tax arrears, if HMRC is convinced that you will be able to do so. If this is not an option, you may be forced into a Company Voluntary Arrangement or even liquidation.
Help from Suitable Debt Solutions
If you have a problem with tax arrears, Suitable Debt Solutions can help. Our counsellors have extensive experience in helping business men and women resolve their tax affairs and, in many cases, continue trading.
