Foreign tax authorities can collect liabilities via HMRC

22 October 2013

Does your company trade remotely into EU countries.  Are you aware of the tax thresholds within each individual country? Whether you are aware or not, if you exceed those thresholds you may have tax liabilities for which you are unprepared!  In which case you may be subject to recovery action under EU law!

Under EU law a member state must make all reasonable attempts to recovery those debts with the individual company or body. However, if all attempts are ineffectual the tax authority from the ‘creditor’ state may apply to the national tax authority of the state where the debtor is registered to recover those monies under the registered states laws.  This action may lead to distraint action, where assets are seized to satisfy the debt, or may even lead to a Winding up Petition being issued and the company’s bank being frozen.

The EU directive under which action may take place is Mutual Assistance Recovery Directive 2010 – 24 – EU often abbreviated to MARD.

If your company is currently encountering cashflow issues and is struggling to pay current liabilities an unexpected ‘bill’ of this nature may tip the scales in the wrong direction.

Read our case study  https://www.companyrescue.co.uk/case-study/south-east-internet-retailing-company-rescued which demonstrates how KSA assisted a company in this exact position restructure its debts and remain trading utilising a CVA (Company Voluntary Arrangement) which including debts owed to an EU member state!