This changed in 2002 when The Enterprise Act of 2002 removed their right as a preferential creditor in the pecking order and they ranked alongside unsecured creditors.
As a result of this change HMRC have become far less tolerant and in 2014 HMRC successfully applied to shut down 1,887 businesses due to those businesses being unable to meet their obligations to pay mainly VAT and PAYE deductions from staff. In total HMRC applied to shut down 3000 businesses.
Pre- RTI HMRC were only aware of a liability when businesses completed their Employers Annual Return so it was possible to accumulate a considerable PAYE debt without HMRC being aware of the outstanding liability.
In addition HMRC have now introduced personal liability notices and these are being issued to Directors whom HMRC feel have been negligent in failing to pay National Insurance Contributions (NIC). This can result in HMRC seeking recovery from Directors who they believe acted fraudulently or negligently in failing to pay NIC contributions.
The implications are serious for HMRC defaulters
The implications are serious for HMRC defaulters and it is therefore vital that businesses have sufficient working capital in place to ensure these liabilities are met as and when they fall due.
For most businesses the biggest asset is money due to them from customers and it is now easier than ever to release monies from debtors to either finance the business in the long term or meet short term liabilities such as a PAYE or VAT.
At Findmeafactor we have sources that offer facilities to a range of businesses including those with a cash flow crisis or with poor credit history.
So if you are facing a difficult situation with HMRC call contact us now before it is too late.