Late corporation tax payments on the increase
21st December 2016 | News
Businesses across the UK owe £1.8bn in late corporation tax payments, amounting to a 15% increase year-on-year, according to new research by Funding Options.
The latest figures indicate overdue corporation tax owed to HM Revenue & Customs (HMRC) stood at £1.52bn in 2014, increasing to £1.59bn in 2015 before hitting £1.8bn in 2016.
Conrad Ford, CEO, Funding Options, believes the figures suggest a growing strain on cash flow for SMEs.
“We have seen an increasing number of companies come to us for funding in order to pay their overdue tax bills,” said Ford.
“These figures demonstrate the growing pressure on cash flow for companies, which could get worse following the outcome of the EU referendum.
“Companies might want to explore in detail alternative finance options available to them before HMRC comes knocking on their door.”
The online business finance supermarket claims that small firms are at the biggest risk of having to pay late penalties or, worse still, having their assets seized due to irregular cash flows, increasing the potential of falling behind on tax payments.
Funding Options claim that smaller companies are increasingly turning to alternative finance as a solution to cash flow problems. Invoice finance, peer-to-peer lending and crowdfunding are all potential avenues that small business owners can consider to avoid dipping into cash reserves or loan facilities.
“Businesses need to make sure they have the adequate funding to pay tax bills on time, without taking capital from other areas of the business,” added Ford.
The UK Government has included Funding Options as one of three finance platforms for its bank referral scheme, designed to make it easier for SMEs to get access to finance.
The scheme is specifically aimed at those who have been rejected for a loan by traditional high street banks, who are required to refer these small firms to a panel of alternative funding sources.