Late Payments Causing Problems For Taxman

15th January 2018.

Late payments are a problem for businesses globally. Although they do the most damage to small businesses, the disruptions they can cause to cash flow can be devasting to businesses of any size. According to new data, the continuous delay of payment is causing many businesses to struggle to meet their tax liabilities on time. At The Credit Protection Association, our members are small, medium and large businesses and most have had to wrestle with late payment. If these late payers are now going to cause further tax arrears for already-struggling businesses, it’s time that something is done to help them.

New research conducted by Funding Options has found that businesses in the UK owe the taxman £4.4 billion in overdue corporation tax and VAT. This is the latest sign that some are struggling to cope with rising operating costs and customers paying late.

Corporation tax arrears were £1.9 billion last year, a record high, while £2.5 billion of VAT payments were overdue.

HM Revenue and Customs acted as the creditor for 2,955 compulsory liquations over the last year, according to a new Freedom of Information request.

Andy Wood, technical director of Enterprise Tax Consultants, which put in the FoI request, said the Insolvency Service data showed firms were struggling with an increasingly complex tax code.

Conrad Ford, founder of Funding Options insists that it is not just about failing companies, with even the most successful businesses struggling with the tug-of-war between late payments and a hefty tax bill.

As a result, a record number of small business owners in the UK are preparing to close, downsize or sell their companies as operating costs hit a five-year high, according to the Federation of Small Businesses.

Late payment is an inevitable unpleasantness for many businesses around the world. If small businesses are the lifeblood of the economy, late payment is its death. With late payers now creating crippling tax arrears and devasting small businesses, the business world could see long-term effects. The Government needs to further simplify the tax code, and lighten the tax load for small businesses. Here at CPA, we work hard to eradicate late payments, offering a range of debt collection and credit management services. We encourage our members and potential members to get in touch with us today, to safeguard your business from bad payers, and revive your cash flow and business.

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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