Overdue corporation tax reaches £1.8bn

Online business finance supermarket Funding Options has found that unpaid corporation tax has risen from £1.5bn to £1.8bn in the last year, with many businesses unable to pay the requisite fees.

Following the UK’s vote for Brexit, a large number of companies are finding it even harder to find the finances less to pay their tax bills, with their customers often needing to delay payments. As such businesses may need to find alternative funding to pay their arrears as there could be further rises in unpaid sums.

Conrad Ford, CEO of Funding Options, said: “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.”

It has been claimed, in Funding Option’s report, that HMRC are employing progressively more aggressive tactics in order to punish businesses unable to pay corporation tax on time. These punitive measures include asset seizures, sending debt collectors to the premises and penalties for late payment.

At particular risk of having their assets seized are small businesses, solely due to the way in which these businesses operate. Many small businesses rely on overdrafts in order to function, however these overdrafts have been cut by around £5bn, over the last five years; this amounts to around 37 per cent of overdraft totals received in the last 5 years.

The ‘Bank Referral Scheme,’ has been proposed by the government and plans to make it easier for small businesses to receive funding. One part of the proposed scheme requires all banks to over referrals to small businesses, to a number of services including Funding Options.

Ford added: “We are excited to be part of the government’s Bank Referral Scheme, which is helping to bridge the funding gap for small and medium sized businesses.”