Tax authorities in the United Kingdom are cracking down on small businesses for late tax payments, sparking concerns from lenders who deem the repercussions "too aggressive." On April 15, alternative finance news publication Altfi reported HM Revenue and Customs (HMRC) applied to close nearly 4,200 business in 2018 for late tax payments. This high number caught the attention of lending platform Funding Options, which encouraged the tax authority to take a "sympathetic approach."
"A key reason behind some businesses not being able to meet their tax payments on time is late payments by larger clients," Funding Options states, adding that Brexit and slowing global economic growth only worsened small businesses' ability to pay taxes on time.
Although the number of applications HMRC filed to close late-paying businesses was down 11.5% from 2017, Funding Options recommended the taxing authority give businesses more time to pay. In its response to HMRC, the lending platform suggested HMRC use its "Time to Pay scheme," Altfi reported, which allows businesses to spread out late payments.
—Andrew Michaels, editorial associate