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HMRC seized assets to recover £42.6m of outstanding debt in the last year, an increase of 175 per cent from the previous year where debts to the Revenue totalled £15.3m.
Under a power called ‘taking control of goods’ HMRC can seize assets in order to settle debts from businesses that have been unable to pay their overdue tax bills. The assets seized are then sold at auction in order to recover the money owed to HMRC.
However, the seized goods will often achieve a far lower price than expected leaving the business with fewer assets and still indebted to the Revenue.
Funding Options, an online business finance supermarket, said that although this tactic is often a last resort for the Revenue, the growing number of businesses who have had their assets seized through this method in the last year suggests that HMRC are cracking down and using increasingly aggressive methods to recover overdue tax.
They added that the significant increase in businesses affected as well as the value of the outstanding debt is a clear indication that businesses are struggling to pay their overdue tax bills.
Small businesses, whose access to bank lending has been significantly reduced in recent years, are particularly at risk of having their assets seized.
Under 'taking control of goods', businesses are given seven days following a visit from a bailiff to pay their overdue tax before their assets are seized. However, the increase in the number of cases suggests that despite this warning, businesses are still struggling to find necessary capital.
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Susie Hughes © Shout99 2016
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