HMRC is increasingly using its powers to seize
businesses assets to recover unpaid VAT bills, according to figures
published by independent finance provider Syscap.
Last year, HMRC used its powers of distraint
2,401 times, seizing the assets of businesses who had failed to pay
their VAT, a 161% increase on 2010 (921).
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Syscap chief executive Philip White said:
“HMRC is taking a much more proactive stance at recovering unpaid
VAT and is also less prepared than it was a year ago to allow
businesses to defer tax payments under its ‘Time to Pay’ scheme, so
businesses really do need to get their payments in order or they
could be at real risk of having their assets repossessed.”
“HMRC had previously reserved its use of
distraint to recover unpaid payroll tax. However, since the
recession it has been far more active in recovering other types of
unpaid tax, most notably VAT.”
“While HMRC will not force a business to sell
its essential assets to pay a tax debt, it may expect them to sell
more liquid assets.
“However, forcing businesses into a fire sale
of its assets could set them back significantly as they are likely
to only recover a fraction of the assets value when sold at such
short notice.
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By GlobalData“At that rate, businesses may have to sell a
significant amount of its assets, particularly if they are facing
large VAT bills.”
