Does Your Business Owe the Tax Man?
If your business is struggling to meet VAT and other tax payments on time, take advice quickly. The decision by the Government to restore 'Crown preference' regarding debts due to the Exchequer from April 2020 could impact negatively on you.
Leaving aside that there are penalties attached to the late payment of taxes, the change means that when a business enters insolvency, HM Revenue and Customs (HMRC) will have preference over other creditors. This in turn may not only result in a tightening in the availability of credit from suppliers (who will rank behind HMRC in the queue for payment if you go broke), but may also lead HMRC to take a tougher line, commencing insolvency proceedings if they think they have a better chance of full payment rather than waiting to see if you can 'trade out' of your difficulties.
It is also likely to make the negotiation of unsecured credit more difficult.