It has been reported that UK businesses owe around £1.8 billion in corporation tax which is up 15% from the previous year, as many businesses find it harder and harder to keep up with their tax bills. The total corporation tax owed is now up to £1.82 billion, up from £1.59 billion last year.
It could be the case that businesses will have to find different avenues and sources of revenue which will enable them to keep afloat regarding their tax bill, as the situation is hardly likely to improve as we move into the post Brexit era where many companies may soon be finding life tough. Many customers who are also businessmen are delaying payments since Brexit and this is having a knock on effect right through the business world.
Conrad Ford, the CEO of Funding Options who are an online business finanace supermarket, said that: “We have seen an increasing number of companies come to us for funding to pay their overdue tax bills. These figures demonstrate the growing pressure on cashflow for companies, which could get worse following the outcome of the EU referendum.”
The pressure is exacerbated even further by the fact that the HMRC are clamping down even harder on businesses who do not pay their taxes. This includes penalties for late payments, seizing of company assets and sending debt collectors to businesses to collect money owed. Small companies it seems are particularly at risk of getting behind with their taxes post Brexit, and when previously they would rely on a bank overdraft to tide them over, they increasingly find that this avenue is now closed as banks have cut overdrafts by around 37% over the last 5 years.
But one small glimmer of hope on the horizon is the Bank Referral Scheme, which requires banks to offer any small business a referral if they reject a loan application from them, to 3 designated finance platforms which include Funding Options.
If you wish to read more on this story you can visit the Accountancy Age website at the following link: Businesses And Corporation Tax