Be afraid, the bogeyman is coming… in the form of HMRC
The bogeyman has existed in the folklore of many cultures for centuries and is (- allegedly) a mythical and sinister figure used to threaten ill-disciplined children in the hope that their behaviour will improve.
In many Latin countries he is known as “el hombre del saco” – the bag man, who snatches wayward children, carrying them away in his sack. [i]
The Bogeyman can take many different forms but to numerous business owners he represents Her Majesty the Queen, or to be more precise, her tax collectors. And just as good children have nothing to fear of the bogeyman it could be argued that if you pay your tax, HMRC should be no cause for concern – but life is never as simple as that.
Take Accelerated Payment Notices (APNs) for example. Taxation is a complex matter and I would always advise anybody who has significant tax liabilities to take professional guidance from a specialist. Many individuals and business owners did just that in the belief that they were legitimately keeping their tax liabilities as low as legally possible. Like most tax payers, I feel that everybody should pay their share but do have a degree of sympathy with those who acted in good faith and have now received an APN. Tens of thousands of APNs have been issued demanding repayment of unpaid tax within 90 days[ii]. In some cases the amounts will be substantial and could easily cause cash flow problems.
Struggling businesses also have a tendency to build up tax arrears. Indebtedness to HMRC may be VAT, PAYE or Corporation Tax. In most cases this isn’t a deliberate plot to rob the Treasury but when cash is tight those pressing creditors which are crucial to the very existence of the business tend to jump to the front of the queue. Essential suppliers, utilities, staff wages, rent, etc., usually take precedence over unpaid tax. But sooner or later the bogeyman – HMRC – will come to get you.
So, if you are having nightmares about unpaid tax and cash flow problems and are constantly looking over your shoulder, it’s time to confront your fears and do something about it.
If you do nothing, the bogeyman won’t go away and will continue to haunt you …until he knocks on your door.