The financial crisis has already pushed hundreds of companies into administration as intense pressure on cashflow highlighted any weaknesses within businesses. But as confidence gradually returns, it had been thought that the insolvency rate would continue to drop off, however, a new approach from HM Revenue & Customs (HMRC) could see things take another turn for the worse.
HMRC has announced an overhaul of its Real Time Information (RTI) approach to tax collection. The service is now asking employers to send in monthly details of how much each employee has been paid and how much tax has been deducted under the PAYE system, marking a change from the previous practice of sending information in once a year.
The problem with this approach is that it prevents companies from spreading out their payments, stopping them from balancing their cashflow. Keith Steven, of insolvency firm KSA Group, explained to the Telegraph: “We're aware of many companies that don't tell HMRC what their PAYE deductions are, or that falsify them. They say, 'OK, it's £50,000 this month, let's say it's £10,000'. They come clean at the end of the year and then ask for time to pay the tax. RTI could highlight a lot of cashflow issues.”
Julie Palmer, partner at insolvency experts Begbies Traynor, added that given the current economic climate, a lot of businesses are already feeling the strain. The potential for HMRC to issue quicker demands for additional tax payment could “potentially push them over the edge”.
As ever, people looking to buy distressed businesses could well find opportunity in the chaos if they are able to turnaround and consolidate any companies that find themselves struggling with cashflow issues when the taxman comes knocking. 
The company is an automatic and industrial door supplier, installing a variety of systems, including but not limited to, automatic doors, fire resistant shutters, entrance barriers, roller shutters and garage doors.
Well-established company operating for over 23 years. Offers a range of driving positions, which include day runs, local runs, local shunting, nights out and tramping.
The company is a business-to-business wholesaler of cask ales, continental lagers, and craft cider. Since its establishment, the business has cultivated strong relationships with high-profile and local breweries, gaining exclusive access to their pro...
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.