Business Advice after the Budget

March 27, 2014 10:44 am

HMRC

So the new budget has been announced and has caused the usual amount of controversy, however hidden between better pensions, lowered tax on beer and bingo, it was announced that HMRC have more powers than ever before, including the power to take money directly from your bank account.

HMRC to take money from your bank account

Altrincham Insolvency Practitioners, Lines Henry, have recently written about the implications of the HMRC taking money directly out of a business bank account, and how in some cases this could create big issues for a companies cash flow, including the possibility that they mat struggle to meet payments to debtors.

Business cash flow is the biggest problem for small businesses in Altrincham, getting clients and customers to pay enough to cover salaries, rentals, VAT, corporation tax and hopefully make a bit of profit, can be very stressful for small businesses.

When Corporation tax time comes around it usually means a big bill from the HMRC, if you have been running your business very profitably with a good cash flow buffer it is easy to put some money aside to pay the HMRC in full, however, many businesses reinvest money into their staff, marketing, bigger premises etc, and this has an effect on the amount of available funds. The HMRC have recently started to let companies set up a payment plan, some companies take out loans to pay them, however all of this can take some time.

Now the HMRC can just go into your bank account and remove the money you owe.

There are restrictions to this, so they will only take the money out that will leave you with £5,000 available cash and will notify you of taking this out. However if your salaries, debts and rent add up to more than £5,000 then this could leave a business in a lot of trouble come pay day!

There are thoughts that the HMRC are setting themselves up as a preferred creditor to the detriment to some businesses.

What are your thoughts on the HMRC’s increased powers? Do you think this will be problematic for Altrincham businesses or do you think it is all hype?

 


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