Published: 05/07/2021 By Hannah McCormackExperts in the insolvency industry have warned there may be an influx in insolvencies this summer once the Covid support lifelines businesses have been relying on start to come to an end.
As we know from last year HMRC were granted preferential status therefore they get paid first should any insolvency procedure take place. For more info on preferential creditors view our difference between creditors page here
Many businesses will shortly, if not already now owe overdue taxes, and therefore the stresses of outstanding debt once again begin to loom for small business owners.
But luckily it’s not all doom and gloom as the government have said they will take it easy on businesses that have been affected by the pandemic. Business Secretary Kwasi Kwarteng wrote to the Financial Times and he stated that HMRC would take “a cautious approach to enforcement of debt owed to government that will have accrued” during the pandemic. (Financial Times article 'HMRC to go easy on struggling UK companies to help with Covid debt' https://ft.com)
The government website states that “When choosing the appropriate action, we will do all we can to help customers facing temporary financial setbacks. We will only consider collecting tax through insolvency proceedings for example, where customers have been found to be fraudulent, deliberately non-compliant, or where they are continuing to accrue debt with no prospect of being able to settle their existing debts.”
Therefore as we always suggest to get advice as early as possible as there may be a number of solutions available to you that don’t involve a formal insolvency procedure.
Call us today on 020 8661 7878 to take advantage of a free chat with one of our Insolvency Practitioners.