HMRC sends 13% more winding up petitions in last year

2nd August 2016

HM Revenue and Customs (HMRC) issued 13 per cent more winding up petitions to small businesses in the last 12 months, with HMRC keen to settle unpaid tax bills with SMEs experiencing cash flow problems.

In 2015, 3,484 winding up petitions were sent by HMRC, up from the 3,074 applications filed to SMEs the previous year.

The figures suggest that a growing number of business, in particular smaller firms, are having greater difficulty managing their cash flow to pay their tax bills on time throughout the calendar year, including VAT and corporation tax.

Conrad Ford, CEO, Funding Options, an online business finance supermarket, says SMEs struggling to pay their tax bills should consider alternative finance to pay them and even out their cash flow before they register on HMRC’s hit-list.

“It’s been well documented that banks have had to scale back their lending to small businesses and assume less risk over the last few years,” said Ford.

“Small businesses should explore all the opportunities that alternative finance has to offer; peer-to-peer lending, crowdfunding, asset finance and invoice finance are some of the many options available to SMEs looking for funding.

“The increasing numbers of petitions filed is evidence that growing numbers of small businesses are unable to resolve their issue with HMRC. Therefore, HMRC has to eventually take this drastic step in order to prevent arrears building up.

“By planning in advance, SMEs can find ways to manage their cash flow more effectively in order to spread the cost of tax bills and other financial burdens whilst still investing in growth.”

Your local TaxAssist accountant can help you prepare timely records and accounts, so you can make informed decisions about your business. They can also produce cashflow forecasts which should help to identify any potential shortfalls in resources and give you an indication of how much to budget for future tax bills. 

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