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Thursday, 4 July 2013

Compliance with Tax and VAT obligations

All seems to be going well in your business, sales and turnover are up, the cash is rolling in from one big client you have won and you can't let paperwork/admin get in the way of more sales....

Unfortunately, there are some bits of paperwork that have to be done by a business. File accounts and annual returns at Companies House, Register for VAT,  Self Assessment for Company Directors, etc etc.

They seem to get in the way of running your business but failure to comply can cause you problems down the line. Your credit rating may suffer, which could be a problem if you want to borrow to fund expansion. But perhaps more importantly it should be an insurance policy if things do take a turn for the worse.

You may find you cant pay vat and paye tax and want to start asking the HMRC for a time to pay or even their support when proposing a company voluntary arrangement

The problem is that HMRC take a dim view of people who come to them for help but who have not complied with the regulations. In the case of CVA's the help we mean is that we are looking for HMRC to support the CVA and as they are often the largest creditor by value their support is critical for the CVA to be approved by the creditors.

We have had some CVA's rejected, not because they offered very low dividends, but because directors had not complied with the tax rules prior to the business' insolvency. Even if these are brought up to date sometimes that is not enough.

So please keep compliance up to date. If you need a good accountant or bookkeeper then give us a call we can put you in touch with good people.

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