OVERDUE corporation tax has risen 15% to £1.8bn for UK businesses.
Total corporation tax jumped to £1.82bn from £1.59bn last year, as businesses are increasingly struggling to pay their tax bills, found Funding Options.
Businesses may need to find alternative funding to pay their arrears as there could be further rises in unpaid sums. Since Brexit companies have even less cash to pay their tax bills, as their customers delay payments.
Conrad Ford, CEO of online business finance supermarket Funding Options, said: “We have seen an increasing number of companies come to us for funding to pay their overdue tax bills. These figures demonstrate the growing pressure on cashflow for companies, which could get worse following the outcome of the EU referendum.”
HMRC is using increasingly aggressive methods to recover overdue tax, it claimed, for businesses unable to pay corporation tax on time there are late payment penalties, asset seizures and sending debt collectors to the premises.
Small businesses are at particular risk of having their assets seized because of volatile cash flows. These smaller companies, who would typically rely on bank overdrafts, have had those overdrafts cut by £5bn, 37% of the total amount, over the last five years.
The government has introduced the ‘Bank Referral Scheme,’ aimed at making it easier for small businesses to receive funding. As part of this scheme, banks are required to offer any small business a referral, if they have rejected their loan application, to three designated finance platforms, including Funding Options.
Ford added: “We are excited to be part of the government’s Bank Referral Scheme, which is helping to bridge the funding gap for small and medium sized businesses.”