They are now responsible for 60 per cent of petitions to wind up companies, up from 58 per cent last year and just 42 per cent in 2001, according to research from accountants UHY Hacker Young.

Research carried out by the firm reveals that HMRC is taking an increasingly hawkish approach towards businesses who owe it tax or national insurance contributions.

UHY Hacker Young say that since HMRC lost its status as a preferred creditor in 2003 it has been quicker to close down companies who have fallen behind with payments.

Preferred creditor status gave HMRC access to the assets of an insolvent business ahead of other creditors.

Edward Cook, partner at the firm’s Manchester office, explains that 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,” Cook says.

He adds that whilst 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,” Cook adds.

Creditors can expect to receive far less for the business assets of a company forced into compulsory liquidation than if the company had been wound up voluntarily or entered Administration with a pre-pack sale of the business as a going concern.

Cook says that forcing a company into compulsory liquidation should be the very last resort.

In his 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.

Cook believes that allowing a business to continue to trade and giving an administrator time to market a business as a going concern will mean that potential buyers will value the business more highly.

“These figures suggest that HMRC is often too quick off the mark to wind up a business,” Cook concludes.

He says that if a company does fall behind on its tax or VAT payments it will need to act quickly to negotiate an affordable repayment plan with HMRC.

“Company directors who can’t come to a workable agreement with the taxman, or who break the terms of an agreement will find that HMRC will be very quick to push the button on their business,” Cook warns.


See Original Article

If you need help to take control of the debt in your business then call in the experts. We can help reduce the debt to a manageable level so you can focus on running the business.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk