The story is typical of the very popular Zombie film genre; the world is in a crazy crisis. In the chaos, a sub-population of Zombie businesses is created by an under pressure Government to make it look like there are fewer corporate deaths. When the experiment goes too far, and costs too much money, the Government has to take action to kill off all the Zombies it created.
Sounds too far fetched eh?
According to many in the insolvency and credit professions, official statistics strongly suggest that HMRC’s TIME TO PAY tax deferral scheme , coupled with its greater reticence in calling for Winding up Petitions against companies that owed tax, have resulted in the creation of possibly thousands of Zombie companies- businesses that have remained alive only because of HMRC’s credit lifeline to them.
Insolvency figures , as a result, have remained much lower then anticipated given the seriousness of the credit crisis we have endured.
But for how much longer?
Figures out today show that HMRC has turned up the heat on businesses failing to pay tax bills; 58% of all Winding Up Petitions presented in the Courts in the last year were brought by HMRC. The previous year, only 43% of the total was down to HMRC action. These figures can be added to the stats that came to light a few days ago showing a marked decline in the number of Time to Pay arrangements. These plummeted by 67% in the third quarter of 2010 when only 26, 000 were recorded. Compare that figure with the 82, 000 registered in the first quarter of this year!
Don’t get me wrong….. I think the HMRC did a sterling job in helping the British economy during the crisis. Many businesses were helped, and are thankful to have survived and prospered. However, there are others who I suspect would have fallen by the wayside if not for HMRC, and probably will still do so once HMRC help is no longer to hand.
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