- 15th October 2018
- Posted by: Suzy Hill
- Category: Business News, HMRC News
Spike in business’s assets seized for tax payments
Over the last twelve months there has been a 45% jump in the number of businesses that have had their assets seized by HMRC to settle tax bills when they do not have the cash to pay, according to research from Funding Options, the online business finance supermarket
Its analysis shows HMRC took control of goods from 2,833 businesses in 2017/18, up from 1,953 the year before.
There was a 67% hike in the amount raised by HMRC from the sale of the assets it seized, up from £41.6m to £69.7m.
Funding Options points out that under the asset seizure rules, HMRC can remove items such as IT systems or machinery, which may be essential for the operation of the business, thus jeopardising its future. It also suggests assets that are seized by HMRC are often sold at fire sale prices, which means that HMRC may be unable to recoup the tax owed by this method.
Conrad Ford, CEO at Funding Options, said: ‘There are often genuine reasons why these firms are not able to pay their tax bills on time, such as cashflow issues stemming from late payments from clients.
‘There may be a better way for HMRC to recover the tax than removing a business’s vital assets.’
Ford suggested one way of doing this would be to give businesses more generous ‘time to pay,’ under the HMRC scheme that allows businesses to spread tax payments over a period of time.
An HRMC spokesperson said: ‘Taking control of assets from a debtor is never our first choice – we always look for payment in full or a satisfactory time to pay arrangement before proceeding to remove goods.’
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