TaxCorporate TaxHMRC ramps up asset seizures to pay VAT bills

HMRC ramps up asset seizures to pay VAT bills

Asset seizures to cover business VAT bills increases 14-fold in five years

THE AMOUNT of companies that have had assets seized and sold by HM Revenue & Customs in order to settle VAT bills rose significantly during the recession.

According to data obtained by finance provider Syscap, the incidence of asset seizures rose 14-fold between 2008 and 2013, with 3,657 businesses having assets seized using its powers of ‘distraint’, compared to just 263 in 2008/9.

Distraint means that the taxman can remove goods or assets such as vehicles, machinery or IT equipment from business premises to sell off at public auction in order to settle unpaid tax bills. HMRC guidance states that it will start the process “as soon as possible” once it has written to companies concerned.

The method generated £92m for VAT in 2013, although Syscap suggests that the actual value of the assets sold is likely to dwarf this, because valuable assets such as stock or equipment are often sold at knock-down prices to achieve a quick sale.

Syscap chief executive Philip White said: “The fact that there has been such a significant increase in the use of HMRC’s powers to seize-and-sell assets to recover VAT during the recession will be a huge concern to SMEs who have been struggling to cope during the downturn.

“When assets are seized and sold at firesale prices, the actual cost to the business far outstrips the original VAT bill. HMRC is only concerned with recovering the tax it is owed, not achieving the best price.”

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1w Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

2w Santhie Goundar
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

3m Emma Smith, Managing Editor
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

7m Emma Smith, Managing Editor
OTS report: Corporation tax should follow accounts

Corporate Tax OTS report: Corporation tax should follow accounts

9m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

10m Emma Smith, Managing Editor
Spring Budget 2017: Making Tax Digital

Business Regulation Spring Budget 2017: Making Tax Digital

1y Shereen Ali, Deputy Editor
Tax fraud loses HMRC £16bn

Corporate Tax Tax fraud loses HMRC £16bn

1y Emma Smith, Managing Editor