VAT Problems

It is important that you file your VAT returns even if you cannot pay them. This will avoid penalties for late filing. You need to get advice as soon as possible if you cannot pay your VAT. If you pay your VAT by direct debit don’t forget to contact your bank to cancel it.

Experience has show that if you cannot pay your VAT on time there are fundamental problems with the business.

If you ignore the VAT arrears they will not go away, the HMRC are taking a hard line with companies that have run up VAT arrears.

It appears that the standard practice is to request full payment immediately, gone are the soft approach days of time to pay.

Most people think that HMRC are a priority creditor, this is not the case any more. They rank like any other unsecured creditor. The problem for business is the will incur the costs of applying for a winding up petition. In some cases it may be cost effective for them to do it.

Think about it from there point a view. They are ranked along with all other unsecured creditors but suppliers can put you on stop or make you pay cash on delivery. HMRC don’t have that facility, you collect taxes on behalf of the government for invoices issued. In most cases you collect the money and hand it over every quarter. Hence the hard line.

You need to deal with VAT arrears before they become too big a problem and you lose the business.

By acting promptly you will not be able to be criticised as a director for operating an insolvent company. If you liquidate the company you may be able to buy the assets of the old company and start again without the debt. If you have staff don’t worry about their redundancy payments they  will be picked up by the Redundancy Payments Board.

Contact us now for immediate attention and impartial FREE advice.