How to avoid tax debt problems

The impact of the credit crunch has been immense, like a pandemic that has spread across the world causing an outcry from struggling businesses in their attempt to survive in the current economic climate.
Thousands of business owners across the country have seen sales drop by as much as 60 per cent yet they continue to trade to try to avoid bankruptcy at all costs – a constant fear at the forefront of every business owner’s mind. It is a multiple of factors such as lack of credit, poor financial management, and reduction in sales, which have caused thousands of businesses across the UK to build up tax arrears.
So for that reason Parvinder Kaur from Express Tax Solutions has compiled her top tips to help businesses avoid getting into tax arrears or tax debt problems.

1. Take action

If you are faced with tax arrears, make sure you do not avoid the problem. Take action before the debt escalates and gets out of control.

2. Register for tax

Make sure that you are tax registered and keep HMRC up to date of your circumstances as failing to do so can result in penalties. These may include interest and surcharges, and in more serious cases prosecution.

3. Pay on time

Always try and make your tax debt payment in the stipulated time frame to avoid penalties or legal action by HMRC. The Revenue do impose a general time limit of six months after the end of the tax year in which time you can notify the Revenue about any new income or capital gains. If you are a new self-employed person, there is also a three-month time limit from commencing business to register. If you notify HMRC late, you will be given penalties.

4. Stay up-to-date

Stay up to date with any tax returns you may receive. The Revenue have the power to impose interest, penalties and surcharges for any late filing, and can also decide on the amount of tax the business ought to pay for any given tax year.

6. Check for errors in your tax bill

Do not always assume that the amount stated on the tax bill will automatically be correct. You should check your tax bill calculations and statements of account against your own tax returns and payments.

7. Prioritise your tax liability

Make sure you allow money to be deposited to pay for your tax. If you have other creditors, do not disregard your tax liability. It may be wise to have a separate account for your tax with a bank or building society and make regular payments to that account so you can meet your tax demands.

8. Get help!

If you are in tax arrears and need help to lighten your tax burden, get help! Express Tax Solutions is a specialist tax company, which aims to help businesses with tax arrears resolve their tax liabilities in the most effective and practicable method for the business by resolving the tax issues that are affecting the business’s performance.

The tax specialists work closely with the business and HMRC to make an arrangement to pay the tax debt which is more realistic to the business to help them avoid being faced with a range of enforcement options available to HMRC.

We have helped businesses in a diverse range of sectors including accountants, solicitors, hotels, travel, property, construction, public houses, e-commerce, leisure, internet, automotives, printing, manufacturing, telecommunications and entertainment.

For a free consultation, call the tax specialists on 0121 222 2422 or visit www.expresstaxsolutions.com