Phil MeekinView Profile
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.
HMRC – the business bogeyman
The bogeyman can take many different forms, but to numerous business owners, he represents HMRC, the tax collectors. However, 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.
Accelerated Payment Notices
Take Accelerated Payment Notices (APNs) for example, which HMRC issues if it believes the recipient has evaded paying tax. Taxation is a complicated matter, and it’s advised anybody with significant tax liabilities should 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.
There’s little point in arguing that anyone should be exempt from paying their share, but there can be a level of sympathy for 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. In some cases, the amounts will be substantial and could easily cause cash flow problems.
Struggling businesses also tend to build up tax arrears. Being indebted to HMRC could mean you’re behind on VAT, PAYE, NI or Corporation Tax. In most cases, this isn’t a deliberate plot to rob the Treasury, but when cash is tight, those pressing creditors who 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 knocking on the door.
Fortunately, there are ways of dealing with the ‘business bogeyman’ and repaying what you owe before your business ceases to exist. One of the insolvency processes available is a Time to Pay Arrangement (TTP), which can help a business repay arrears to HMRC. Alternatively, you can look into a Company Voluntary Arrangement (CVA), in which your debts are repaid in monthly instalments. Both the arrangements need to be approved by your creditors, but if given the go-ahead, can help alleviate your debts.
HMRC has acquired a reputation as the ‘business bogeyman’. Although paying on time and staying on top of your tax contributions should keep you in their good books, this can’t be guaranteed. If you’ve been served with an APN, rightly or wrongly, you’re likely to be feeling the pressure. Even without these notices, you could still find yourself falling behind on payments of VAT, PAYE, NI and Corporation Tax. Fortunately, there are arrangements which allow you to repay your liabilities to the tax office at a rate that’s suitable for you.
If you do nothing, the bogeyman won’t go away and will continue to haunt 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. Contact us today for free impartial advice with no obligation and help keep the bogeyman from the door.