Don’t ignore communications from the tax man
From the end of June last year, as I reported, HMRC has resumed its pro-active approach to tax collection and enforcement.
Since then, it has collected more than £5.8bn and prevented a further £11.2bn in revenue being lost through its investigations activity, according to newly published research by Pinsent Masons.
This represents a total collected of £30.8bn, an increase from £28bn collected in 2020.
The research found “HMRC has been taking a “tougher stance” on tax errors and avoidance in the past year and ramping up compliance activity as it looks to make up for the shortfall.”
HMRC also has recently acquired greater powers to give joint and several liability notices to directors, shadow directors and certain other individuals connected to a company if it becomes insolvent. This means that people who do not appear on the director register can also be pursued.
HMRC has always been known to favour issuing winding up petitions on businesses with significant tax liabilities, particularly when it receives no response to its communications despite repeated attempts.
While there is no denying that times are tough for businesses as they struggle to return to normal activity following the pandemic, supply chain shortages, rising energy prices and now the instability produced by Russia’s invasion of Ukraine, it is still better for a business to discuss its situation with HMRC and if possible try to negotiate time to pay its liabilities.
You need to be able to prove the financial difficulties you are having and that’s where our free, downloadable cash management tool can help.
You can find it here.
And if you would like to talk over the options for restructuring your business K2 can help. Just message or call us.