With over 300,000 businesses now having made ‘time to pay’ arrangements with HM Revenue and Customs (HMRC), the fear is that businesses that are insolvent are using such arrangements to hide their precarious financial status.
With HMRC said to be tightening up on the availability of such arrangements, those doing business with firms which may be walking a financial tightrope should take care to control their credit risk. Government bodies are no longer preferential creditors on insolvency and the practical effect of this is that HMRC are inclined to push a firm into administration or liquidation more quickly than they would have done a few years ago if the alternative is to risk a smaller payout by letting the business continue to trade.
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Tax Deferrals 'Hide Insolvency'
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