If you run a business and habitually fail to pay your PAYE contributions
think again – HM Revenue & Customs is about to receive a whole new set of
powers to deal with you.
The Budget saw chancellor Alistair Darling announce that HMRC would have the
power to demand “security” against PAYE and National Insurance contributions.
Not only that, but those who fail to offer security could be charged with a
criminal offence punshable with a fine of up £5,000.
If once you thought that delaying your tax payments was a handy way of
managing your cash flow, those times now seem to be over.
HMRC has clearly run out of patience and the chancellor, desperate for
revenue in the exchequer’s coffers, is in the mood to help.
Francesca Lagerberg, head of tax at Grant Thornton, said: “This is all part
of a general drive to nail down tax payers. This will be an issue for any
organisation where they are not paying their balances on time.”
The new measure is intended to go live in April next year and there was
immediate speculation about which sectors could be hit hardest by the new
One suggestion from tax experts is that football clubs, struggling with their
finances in the current climate, could suffer badly.
Both Portsmouth and Crystal Palace recently went into administration, owing
HMRC millions in unpaid tax – though it remains unclear whether this was PAYE.
Cathy Corns, a tax partner with Mercer & Hole, said: “If you are talking
about football clubs, this will hurt if they are paying players more than they
can afford in tax.”
Still a year away from implementation there is time for those in difficulty
to get their affairs in order.
Those who have been in trouble over VAT payments will recognise this measure,
which it has applied for some time.
Once again, powers that old Customs officials had are being handed on to
their old revenue colleagues.
IN OUR VIEW
HMRC has constantly pushed for more powers to strenghthen its position
with the taxpayers.The days when anyone boasted that the taxman was an “enabler”
have long gone. A change in attitude towards paying tax, plus the need for
revenue means HMRC now uses a strong arm rather than persuasion. Such is the
case with the “security” issue. Businesses will need to be wary and we can look
forward to HMRC forcing the first prosecution to set an example.
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