If you are an employer you will be familiar with acting as a tax collector and paying these amounts to HM Revenue and Customs. Failure to submit the returns and payments of VAT and PAYE can lead to legal proceedings. The Crown may implement these against you if returns and payments do not meet requirements. This can involve the use of bailiffs, County Court Judgments (CCJs) or the presentation of a winding up or bankruptcy petition.
HMRC no longer hold preferential status when a business enters an insolvency procedure. However, this does not mean that they will not act quickly and they do have extensive powers in certain circumstances.
Ignoring VAT and PAYE arrears and waiting for the inevitable should not be an option. Neither should insolvency! Taking proactive steps will give you more options and allow you to maintain control of your business. The worse strategy is to ignore letters from the Crown, not receiving a reminder shouldn’t make you complacent. And by ignoring HMRC, you may become involved in recovery action, which may ultimately lead to the business being wound up.
There are a number of options open to you however. If your only debts are “Crown Debts” (ie taxation in its different forms) we can help you make a proposal to HMRC. These may be recent or longstanding. Other amounts may be owing to suppliers, the landlord or bank.