BusinessBusiness RecoveryTaxman gets aggressive over debt collection

Taxman gets aggressive over debt collection

Over half of the petitions issued to wind up companies are now issued by HMRC

HM Revenue & Customs
is now issuing 58% of all the petitions to wind up companies, research by
UHY Hacker Young has revealed.

The accounting firm said that this percentage had increased from a similar
study undertaken five years ago, when HMRC was only responsible for 42% of wind
up requests.

UHY Hacker Young
believes that HMRC’s more aggressive approach to collecting unpaid tax or
national insurance contributions is due to its loss of preferred creditor status
in 2003.

HMRC used to have priority access to the assets of an insolvent business, but
now that it has to share recovered assets with other creditors, it is looking to
wind
up companies
earlier and more frequently.

‘If HMRC feels that the company isn’t going to be able to repay it, then it
is willing to push the button on them a lot earlier. It is only when the HMRC
feels certain it will recoup more money by allowing a company to trade out of
its difficulties that it will then cut the company slack,’ said UHY Hacker Young
partner Edward Cook.

Further reading:

Insolvency without borders

Revenue drops Exeter FC challenge

Time to boot out the super creditor rule

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