However, this is far from the truth in the COVID-19 age, and HMRC wants nothing more than to protect livelihoods and keep people in work. They really have taken the lead by pausing debt collection activities and offering support packages like CJRS and SEISS.
"So, many businesses have been affected by COVID-19!"
As a result, many face an uncertain financial future and, as the support schemes start to wind down, business owners, directors, partners and the self-employed will need practical support.
Debt collection via HMRC will restart soon and they will be contacting customers who have fallen behind with tax payments during the pandemic. They have said upfront that they will take an understanding and supportive approach with those who have tax debts are having difficultly making payments.
Of course, as an accountant, my advice is the same as HMRC's is. If you can afford to pay your taxes in full then do so, however, if you are struggling, HMRC will work out a plan with you and I'll be there to support you as well.
HMRC has to restart collecting tax debt again as it needs to bring in money so the Government can fund public services like the NHS and schools, but also to support the economic recovery of the country as a whole.
However, they will do everything they can to support viable businesses with cash flow issues. But be warned, if your business is not viable then they will take action to protect competitors and supply chains. They say that it is in no one's interest to allow unsustainable debts to build up in a business.
"So, what will HMRC do?"
If an individual has a tax debt, they will always try to contact them by phone, text message or post to talk about their personal circumstances and agree on a way forward. Please don't ignore this communication as they will get progressively firmer until you get a knock on the door by a tax investigator.
HMRC has payment plans such as Time to Pay where they can pay what they can afford over time and there are typically over half a million Time to Pay arrangements in place right now and over 90% complete successfully.
Getting in touch with HMRC yourself helps them to understand your circumstances better. Other options such as short-term deferral are also available in the right circumstances and there are other arrangements that can be agreed including repayment holidays and extended repayment terms.
"What you should never do is ignore HMRC!"
If they're trying to get in touch with you then they are trying to help you. If they have to start enforcement against an unresponsive individual, you could lose your personal property and even end up in court having to explain yourself.
Remember, HMRC really wants to help and support you.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you're worried about HMRC collecting tax debt from you, Click here to get in touch or give me a call on 01908 774320 and let's see how I can help you.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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