THERE was a 13% increase in the number of winding up petitions filed by HMRC in the last year in order to close businesses and meet unpaid tax bills, says Funding Options, the online business finance supermarket.
HMRC filed 3,484 winding up petitions in 2015, up from the 3,074 applications filed the previous year, as HMRC forced businesses to close in order and liquidate their assets in order to cover the unpaid tax bills.
The sharp jump in the number of winding up petitions filed by HMRC highlights the difficulties businesses, and in particular SMEs, can have in managing their cashflow to pay their key tax bills throughout the year, such as partnership tax, corporation tax and VAT bills.
SMEs can often have a more volatile cashflow than larger business. For example, VAT is billed on amounts invoiced rather than amounts received which can present a problem for small businesses when a key invoice is not paid on time and the tax bill is due.
Small businesses can also be more reliant on seasonal trade which can mean fluctuations in their cashflow throughout the year.
Conrad Ford, CEO of Funding Options said: “Failing to pay tax can lead to disastrous consequences, but the business may not necessarily be at fault.
“Because of economic headwinds caused by Brexit we may well see increasing numbers of winding up petitions in the next few years.”
Committee expresses concern about costs to businesses and April 2018 implementation date
Tallat Mahmood appointed to corporate finance team of Top 20 firm
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
Top 25 firm HW Fisher & Co has acquired London firm Rhodes & Rhodes