HM Revenue & Customs (HMRC) issued a record number of court orders to seize company assets in 2016, indicating that the tax office is happy to go after all businesses suspected of tax evasion.
The figures, published by Funding Options, show that the Revenue issued 3,900 applications to wind-up firms with outstanding tax bills in 2016 – up 12 per cent from the year previous.
Of these orders, it successfully seized the assets of 2,065 businesses, representing a success rate of 53 per cent.
Conrad Ford, CEO of Funding Options, said: “Shutting a company down is the biggest weapon in HMRC’s arsenal, but it’s one the taxman is using more and more.”
HMRC is facing increasing pressure from the public to crack down on tax evasion. Events in 2016, when Google was alleged to have owed close to £600 million in unpaid taxes, sparked HMRC to launch a dedicated tax fraud and evasion hotline last month.
At the time, Jennie Granger, HMRC’s director general for customer compliance, said: “Information provided by the public is a crucial element of HMRC’s work to close the tax gap, so it’s vital that the reporting process is as simple and accessible as possible.
“The HMRC Fraud Hotline will form an important part of our intelligence gathering operations to bring in more money for the exchequer and the country.
“We encourage the public to continue to work with us and report any suspected fraud or evasion to us for investigation.”
The Revenue said it received 113,000 reports from the public providing information to the department.
Mr Ford added that small businesses were most likely to be on the receiving end of HMRC’s assault.
“It’s vital that small business owners don’t stick their heads in the sand: they need to try to work with HMRC to prevent arrears backing up. They should also take pro-active steps to make sure they have a funding safety net readily available for when they need it,” he said.
Our specialist team of insolvency and corporate recovery advisers can help businesses facing threats of winding up petitions from HMRC to negotiate time to pay arrangements, achieve expedited sales or to wind up their affairs in an orderly manner. We can also help directors to understand their responsibilities and assess what liabilities they may face personally in the event of a liquidation.
We offer a comprehensive insurance scheme that will cover the costs of work we undertake on your behalf in the event of HMRC investigating your financial affairs. Please contact us to find out more.