January is all about making resolutions and getting the decks clear to make a good start to the year. However, businesses making use of HM Revenue and Customs’ (HMRC) Time to Pay scheme could be faced with more than they’d bargained for, warns cashflow specialist Bibby Financial Services.
Time to Pay launched a year ago this month and to date has helped more than 150,000 businesses delay their tax payments. However, with the Government’s tax deficit increasing by the minute, the HMRC is, understandably, looking for ways to recoup some of these unpaid taxes.
Edward Rimmer, Bibby Financial Services chief executive, UK and Ireland, said: “It comes as little surprise that the HMRC is looking to take a tougher line with businesses to claw back some of these unpaid taxes and, even if the scheme does not completely come to an end – as has been reported in some circles – business owners should be prepared to have their finances and tax payments scrutinised much more rigorously.
“But the last thing businesses need at the moment is to have the rug swept from beneath their feet so we urge all businesses owners to check as soon as possible they will be able to meet any payments and, more generally, that their finances are in order.”
“Indeed, the initial structure and now the proposed changes to the tax deferral scheme will also mean that some businesses are now unable to take advantage of it, therefore increasing the likelihood they might now fail.
“With time running out to make the most of other Government credit schemes, many businesses will be facing a tough 2010 indeed.”
Bibby Financial Services is on hand to help any small businesses who think they might be faced with a big tax bill come January. Bibby Financial Services can work with business owners to look at all cashflow options and put together a remedial plan.
Edward Rimmer added: “January is always a crucial month for businesses and it can often be make or break. With large amounts of excess stock from Christmas often left over, financial liquidity can take a big hit as cash flow is tied up in unsold stock, and many customer invoices are left outstanding.”
“We would urge small businesses to ensure they do all they can – including keeping stock to a minimum – to ease pressure on their cash flow and allow them to flourish, rather than fail, this coming new year.