Has HMRC lost its bite?
19 October 2021: Following the winding back of Covid-related legislation, which has undoubtedly helped many businesses survive, HMRC are once again able to petition to wind-up companies.
The press has often reported that the insolvency profession will be rushed off its feet when things implode. However, this simply hasn’t happened yet and, if it does, it is unlikely to be because of HMRC. HMRC are not actively petitioning for companies to be wound up and are instead encouraging those with debt to get in touch and discuss the situation, no matter how dire the position might be.
In the past we may have seen companies with a clean track record able to obtain time-to-pay arrangements of, on average, 12 months, sometimes 24 months, in order to spread debt repayments. If the previous track record of paying HMRC was less than perfect it would have been very difficult to obtain a time-to-pay arrangement. Now, HMRC are saying that they will actively work on whatever realistic proposals are put to them, even if that means longer agreements, which certainly provides more breathing space.
HMRC understands that this is a unique time those companies find themselves in. What may have been a thriving business that always paid its tax on time before the pandemic may be a far cry from the state of the business now.
HMRC will still, rightly so, wind-up those that are actively evading taxes and causing undue harm. For those with genuine reasons for default the message we are hearing is that the support from HMRC is there. Time will tell if that is the reality.
If you would like to discuss any tax arrears that your company may have and how we can help you to move forward please contact any of the management team at BRI Business Recovery and Insolvency who would be happy to help. BRI Business Recovery and Insolvency offer an initial meeting, without obligation and free of charge.