Over the past 2 years, we’ve noticed a much more vigorous approach from HM Revenue & Customs in collecting business taxes.

The reason behind this increased activity is undoubtedly the Treasury looking to alleviate the effect of its decreasing tax receipts by tightening its enforcement arms collection methods.

The effect has been stark, in the 2010/11 tax year, HMRC issued 3,367 winding-up petitions, whilst in 2011/12 there were 5,302 issued. Extrapolating out from the activity Robson Scott has seen, I wouldn’t be surprised if that increased to almost 7,000 for this tax year.

HMRC’s investigations units have been unlikely winners whilst other departments have suffered swingeing cuts. £917 million in extra funding has been promised, with the quid pro quo that the Treasury expects HMRC to generate a further £7 billion in recovery of taxes that would have otherwise remained unpaid.

The main upshot from this is that official investigations into businesses and their owners are likely to rise five-fold, whilst legal actions will commence quicker and be more thorough.

The new RTI payroll collection method is also likely to surreptitiously lead to a greater level of defaults and insolvencies. Previously, businesses may have historically underpaid their PAYE/NIC contributions as a form of soft funding, and but with the introduction of RTI, this is going to become a lot more difficult, or at least much riskier.

The outlook then for the immediate and medium term future is an increase in HMRC recovery action. Where they believe there are saleable assets, their preferred choice is to send bailiffs to company’s premises to distrain over company’s assets, and if agreement isn’t reached they will uplift and sell. Where there is no obvious asset to uplift, or they are unsure, then they are likely to issue a winding-up petition to place the company into compulsory liquidation. O average this will occur much quicker and more often than in previous years.

Where they feel that fraud might have been committed, we will see many more Code of Practice 9 (COP 9) investigations. These can be quite frightening experiences and anyone issued with a notice should seek advice as early as possible, as their ramifications personally for business owners can be horrendous.

If you are in default with your tax liabilities, or if HMRC have distrained, issued a winding-up petition, or a COP 9 investigation, you need to speak with experts as soon as possible. Robson Scott are hugely experienced at negotiating and understanding where HM Revenue and Customs are coming from, and consequently we are very successful at implementing strategies that work for you.

Any queries regarding tax arrears and how they may affect you, please get in contact with me at ewall@robsonscott.co.uk