Since 2012, HMRC have had extra powers to demand security payments and if companies don’t pay in full, they can be taken to court and fined. A recent case in November of this year showed HMRC demanding a security payment of £70,000 from two directors and a secretary from a Berkshire-based company.
HMRC can hold on to this payment for up to two years and treat it like a deposit, using it to cover any overdue debts.
This seems to be happening more with trading companies, therefore it is important that directors are aware of these security demands. If your company is struggling financially and there is likely to be a problem with paying tax in the future, a Time to Pay deal (TTP) may be the best solution. If HMRC agrees to this, they will no longer need security which will of course ease financial pressure significantly.
If there are already problems, a hefty security payment could force a company into administration or liquidation so it is vital to seek help from a turnaround or insolvency practitioner before it’s too late. Call us on 0800 9700539 and we can talk you through all the available options to help save your business.