More than 1,953 businesses had their assets seized from HMRC in 2016/17 demonstrating that the HMRC are using more aggressive methods to obtain unpaid tax. According to Funding Options, the online business finance supermarket, these figures are up 23 per cent in the past year from 1,592 in 2015/16.
The ‘taking control of goods’ can be used by the HMRC to raid premises without warning in order to seize assets and reconcile overdue tax bills.
By seizing a business’s vital assets, such as IT systems or machinery, can affect the running of the firm and put them at serious at risk of closure.
Assets that are seized by the HMRC are usually sold at fire sale prices. Funding options added that only £41.6m was raised last year through asset actions, which is a small figure considering the disruption caused to businesses whose assets were seized.
Seizing assets is often a last resort, however, with the HMRC are coming under pressure from the Exchequer to increase tax take. Funding Options states that the continuing increase in cases suggests HMRC is cracking down on small businesses failing to pay tax on time.
Conrad Ford, CEO of Funding Options, says: “In a worst-case scenario, having their assets seized by HMRC could be fatal to small businesses”.
“HMRC is displaying that it is increasingly cracking down on small businesses with overdue tax bills, and won’t hesitate to use all the powers at its disposal.”