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Friday, 29 October 2010

Time to pay applications getting rejected by HMRC

In figures released today the HMRC are rejecting more applications for time to pay deals to defer tax, VAT and PAYE being the most common taxes that are in arrears by companies. The figures show that the percentage of applications being rejected had risen from 2.6pc in 2009 to 5.2pc this year.

If you need a time to pay deal then you need to present a strong case to the HMRC that you are a viable business. If you can't pay your tax then you may be technically insolvent and as a director then you should act reasonably.

Remember, if the company is insolvent you must act to maximise creditors interests.

If there is no reasonable prospect of the following happening:

New or additional capital or finance being introduced to the business to return the balance sheet to a solvent position or to remove the cashflow pressures.

A sale or acquisition of the company

A company voluntary arrangement CVA or administration

then the directors may be accused of wrongful trading. If you are worried about this or your accountant has said he/she is concerned then look carefully at directors disqualification.

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