It’s no surprise to hear that a lack of credit, poor financial management and a reduction in sales during the recession are creating problems with tax arrears for SMEs. Here’s some fundamental advice on dealing with HMRC:
1) Register for tax
Make sure that you are tax registered and keep HMRC up to date of your circumstances as failing to do so can result in penalties. These may include interest and surcharges, and in more serious cases prosecution.
2) Pay on time
Always try and make your tax debt payment in the stipulated timeframe to avoid penalties or legal action by HMRC. The Revenue do impose a general time limit of six months after the end of the tax year in which time you can notify the Revenue about any new income or capital gains. If you are a new self-employed person, there is also a three-month time limit from commencing business to register. If you notify HMRC late, you will be given penalties.
3) Stay up to date
Stay up to date with any tax returns you may receive. The Revenue have the power to impose interest, penalties and surcharges for any late filing, and can also decide on the amount of tax the business ought to pay for any given tax year.
4) Check for errors in your tax bill
Do not always assume that the amount stated on the tax bill will automatically be correct. You should check your tax bill calculations and statements of account against your own tax returns and payments.
5) Prioritise your tax liability
Make sure you allow money to be deposited to pay for your tax. If you have other creditors, do not disregard your tax liability. It may be wise to have a separate account for your tax with a bank or building society and make regular payments to that account so you can meet your tax demands.
6) Don’t delay
If you are faced with tax arrears, make sure you do not avoid the problem. Take action before the debt escalates and gets so out of control that HMRC has to enforce a solution.
Express Tax Solutions is a specialist tax company which aims to help businesses with tax arrears resolve their tax liabilities. For more information visit www.expresstaxsolutions.com