25 Feb HMRC Seize Assets for unpaid tax bills
Small businesses such as sole traders have had a record number of their assets seized as a result of non-payment of self-assessment tax bils
HMRC made a record number of asset seizures last year from self-assessed taxpayers who could not settle their tax debts, many of them self-employed professionals such as accountants and solicitors, according to analysis by IT finance provider Syscap.
Syscap’s research shows HMRC took action under its power of distraint against 1,488 self-assessed taxpayers. This marks an 8% increase on 1,376 seizures in 2011/12, and is 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 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.
Syscap says its research shows that whereas HMRC previously used asset seizures primarily to recover unpaid payroll taxes, it 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.
The company also says the sharp rise in seizures from self-employed professionals and traders is in contrast to the concessions available under HMRC’s ‘Time to Pay’ scheme available earlier in the recession, which saw UK businesses deferring some £4.5bn in tax payments.
Philip White, CEO of Syscap:
‘Small businesses facing cashflow problems as the January 31 tax deadline looms need to take immediate steps to secure funding. HMRC is more likely than ever to take a draconian approach to tax debts.’
Source: Accountancylive.com.