HER Majesty’s Revenue & Customs (HMRC) is taking an increasingly aggressive stance against businesses that fall behind with tax payments, according to research from Wrexham-based accountancy firm UHY Hacker Young.

Its findings show HMRC is now responsible for 60% of petitions to wind up companies, up from 58% last year and just 42% in 2001.

UHY Hacker Young said since HMRC lost its status as a preferred creditor in 2003 it has been quicker to close down companies that have fallen behind with payments. Preferred creditor status gave HMRC access to the assets of an insolvent business ahead of other creditors.

Anthony Thomas, partner UHY Hacker Young said, “HMRC is now clamping down on companies who have fallen behind with payments much earlier and more frequently.

“They want their money and if this means jobs have to be lost then so be it.”

“While companies will generally have built up a good working relationship with their other creditors that will allow them to negotiate a standstill on payments it is now almost impossible for them to establish that kind of relationship with the taxman.

“HMRC won’t show any hesitation in pulling the plug if it thinks a company won’t be able to repay them.”

However, according to the North Wales firm, creditors can expect to receive far less for the business assets of a company forced into compulsory liquidation.

Mr Thomas added, “Forcing a company into compulsory liquidation should be the last resort.

“In our experience creditors can generally recover a higher proportion of the money owed to them if they can come to an agreement with the directors, or if they can persuade the directors to sell the business as a going concern usually through administration.”


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