HMRC targets nearly 2,000 SMEs over unpaid tax
Close to 2,000 businesses had assets seized by HMRC in 2016-2017 as part of a clampdown on unpaid tax, figures from Funding Options have revealed.
Some 1,953 businesses were raided, a jump of 23% on the previous year when just shy of 1,600 premises were targeted.
HMRC can use its power to take control of goods and raid premises without warning if there are outstanding tax liabilities, with assets then auctioned off to cover any outstanding debts.
Such actions can cripple small businesses or even force them into insolvency, especially if the assets that are seized are crucial to its running, such as IT systems or machinery.
Funding Options CEO Conrad Ford added: 'In a worst-case scenario, having their assets seized by HMRC could be fatal to small businesses.'
The latest data shows that many assets are sold at cut prices, with the total seized raising £41.6 million, a figure that Funding Options says is low given the disruption suffered by affected businesses.
Any number of unexpected events can leave a business struggling with its tax liabilities but there a range of options that can help, provided action is taken early.
For those experiencing VAT and PAYE issues or unpaid tax, HMRC time to pay services can help to limit any negative impacts and provide support with unfair penalties, payment demands and winding up petitions.
This ensures that businesses have the best possible chance of continuing trading while meeting all of the necessary tax requirements.
Funding Options has suggested that the growing number of businesses being targeted by HMRC is reflective of a crackdown by HMRC on those that fail to meet their tax liabilities.
Although seizing assets is deemed a last resort, it does highlight that HMRC is prepared to use all of the powers at its disposal.
By Phil Smith