HMRC—Q2 2023 Update: The Number of New Debts at Record Levels
by Sushil Patel
HMRC will often be a key creditor for any business and payments are normally significant in size and can provide a cash benefit if payments are stretched. It can then be difficult to repay arrears alongside current liabilities.
During the pandemic, HMRC has provided unprecedented levels of support to UK businesses during the pandemic and has actively not sought to take enforcement action for the non payment of debts but this is only a temporary measure.
As the UK progresses along the Government’s roadmap to recovery, the COVID-19 state support measures will be wound down and the restrictions on creditor enforcement action will be lifted. Creditors such as HMRC that have accumulated arrears will recommence debt recovery activities in an effort to recover their indebtedness. HMRC will be under pressure from the Treasury to collect overdue debt as expediently as possible to improve the National Debt. This environment is likely to present challenges to businesses looking to safeguard cash reserves.
Given that many UK business have accumulated some form of tax arrears over the last 12 months, the effective management of HMRC as a key creditor will be crucial for those business looking to restructure their debts into affordable monthly repayments. Without a proactive approach to deal with tax arrears, there is a heightened risk of enforcement action and the inability to agree structured payment plans with HMRC.
The key actions and considerations that all businesses should consider before approaching HMRC are the following:
We have significant experience in negotiating the best possible package of support from HMRC. We can provide additional support during the process if required, including financial forecasting, fund-raising and the management of stakeholders. Please contact us to discuss how we can help.
Rob Bullock, a client of Kroll, explains how we helped his company negotiate the best possible package of support from HMRC. Get in touch with our experts to learn how you could manage key stakeholder debt, including HMRC.
Supporting businesses and individuals in difficult situations and distressed scenarios.
by Sushil Patel
by Sushil Patel
by Sushil Patel
by Sushil Patel