Reports of HMRC’s ‘poor practice’ on debt collection should encourage business owners to deal with debt fast
With reports of HMRC executing ‘poor practice’ when it comes to recovering tax owed – and a study by the Citizen’s Advice Bureau showing it failed to meet regulations set by government regulators for private debt collection agencies – any business that owes money to HMRC should aim to deal with the debt quickly and efficiently.
Here are some tips to follow if you find yourself owing money to HMRC.
- Face up to it – sometimes it is the case that company directors put off tackling the problem, but it won’t go away. Having an issue such as this hanging over you whilst trying to run a business will only be detrimental to the business in the end and remove focus from company operations and growth. Assess the extent of the problem and make a resolution to deal with it.
- Don’t be afraid to seek help – owing money to HMRC can arise from a variety of situations that can happen to anyone, so don’t let worries about what people might think affect your decision to reach out for help. Your accountant is a good first port of call to act on your behalf in liaison and subsequent negotiations with HMRC.
- Explore all funding sources – in an ideal world, you will want to pay off the debt in entirety, and ways to do this may be through bank lending, from savings or seeking help from family or friends. HMRC will want to know you have exhausted potential sources.
- Ascertain instalment or deferral options – whether negotiating for yourself or using your accountant to help in negotiations, there are other options that may be available to you. Whilst you can liaise directly with HMRC to discuss these, your accountant will know what kinds of circumstances and factors can be leveraged to help your case for instalments or deferred payment. Building a case for deferred payment or a payment plan based on the amount owed, any previous debt, business forecasts and projections will be best handled by a professional.
The faster the issue is faced and resolved it the quicker the business can move forward. HMRC debt can be daunting but doesn’t need to spell disaster or demise for a business. Many a firm has faced debt and come out the other end and continued to thrive and grow – it can be much more common than people think.
If any of our clients are worried about HMRC debt and need advice, they can call Tessa on 01827 54944.