HMRC asset seizures from self-employed hit new high

by Susie Hughes at 11:12 21/01/14 (News on Business)

HM Revenue and Customs seized assets from a new high of 1,488 self-assessed taxpayers – the majority of whom are self-employed professionals– over the past year.

According to independent finance provider, Syscap, this is HMRC’s most frequent use of its power of ‘distraint’ against self-assessment tax debts on record, and is an eight per cent increase on 1,376 seizures in 2011/12, and more than double the 730 seizures of 2010/11. HMRC’s power of distraint allows staff to visit business premises without warning in order to collect unpaid taxes. If the bill, usually including interest and penalties, is not paid within five days, HMRC can remove and sell business assets such as computers, vehicles and other key equipment, without a court order. Advertisement Syscap says that the January 31 tax bill deadline could trigger another wave of enforcement action as small professional firms struggle to find funding for their tax bills. If these businesses fail to find funding, it can set the wheels of enforcement action in motion, which may lead to business asset seizures, potentially destroying their ability to do business. Syscap said that HMRC’s escalating use of its distraint powers is another example of its increasingly inflexible approach to business tax debts. At the height of the recession, HMRC allowed businesses a grace period under its ‘Time To Pay’ scheme. In 2009, UK businesses deferred £4.5 billion in tax payments. The ‘Time To Pay’ scheme has now been virtually wound up, with HMRC instead targeting an overall revenue increase of £7 billion per year by 2014/15. HMRC previously used asset seizures primarily to recover unpaid payroll taxes, but has since begun to use its distraint powers for a much wider range of taxes, including the self-assessment taxes paid by small business owners. With the January 31 tax deadline rapidly approaching, Syscap says that HMRC’s hardline stance on tax debts makes cashflow issues for small businesses an even more pressing concern and that it had witnessed a 60 per cent increase in requests on one of its own schemes from accountants and solicitors ahead of the January 31 tax deadline last year compared with the previous year. Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2014

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