HMRC getting tough on late payments of VAT

Small firms are at risk of having assets seized by HM Revenue and Customs (HMRC) if they don’t pay VAT on time, according to new research.

Figures released by Syscap indicated HMRC used ‘heavy-handed’ tactics to recover VAT bills 2,401 times in 2011, compared to just 921 times in 2010.

With increasingly-expensive overheads and regular VAT payments, many small firms are finding it hard to generate consistent cash flow to meet such costs.

Especially as payments from debtors continue to get later and later, it is essential that small businesses get a grip of their cashflow sooner rather than later.

Chief executive at Syscap, Philip White, said, “HMRC had previously reserved its use of distraint to recover unpaid payroll tax. However, since the recession it has been far more active in recovering other types of unpaid tax, most notably VAT”.

Business finance solutions for small businesses

As bank credit becomes harder to access, small businesses may not know where to turn when it comes to locating external finance.

However, Skipton Business Finance has funds available for small firms and is especially keen to speak to new starts or businesses without a long extensive credit history.

Why not see if a flexible business finance facility with SBF could be just what your business needs to increase its cashflow.