Tax deferral scheme - insolvency concerns
It appears HMRC has been reassured that its tax deferral scheme for businesses may continue, despite concerns raised by insolvency practitioners that it encourages companies to continue trading while insolvent.
There remains concern that the process may put other businesses at risk as there is no obvious way for third parties to identify such struggling businesses.
HMRC’s opinion appears to be that it assesses and monitors the risks and enters into realistic arrangements to give viable businesses time to pay.
Where a business is not viable, HMRC will take the appropriate action to recover as much of the debt as possible.
Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author.
Date: 18th August, 2009
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