Member Article

Don’t ignore HMRC - they will be back!

SHEFFIELD insolvency expert Ryan Holdsworth has warned that businesses who think high levels of post Covid debts will not be called in are refusing to face a damaging reality.

Ryan, of business turnaround and insolvency practice Graywoods, says too many companies are choosing to believe there will be a softly softly approach to outstanding debts, especially when it comes to HMRC.

“One company we know of has run up £600,000 worth of debt to HMRC over the last two years but because they aren’t knocking on the door right now, there seems to be a belief that they never will,” Ryan said.

“This particular company was concerned but not concerned enough to be taking the appropriate steps to resolve the issue.

“The more pressing concern, perhaps understandably, was one of paying the wage bill, tackling the immediate issues but failing to look at the bigger picture.”

Ryan added that the problems for directors burying their heads in the sand could only increase as government initiatives come to an end and restrictions on recovery of commercial rents cease in the coming weeks.

“One particular company had run up a debt of £250,000 for a year’s rent alone and by the time they had added up all the various areas on non-payment, they actually had debts of £2.5 million in total,” he said.

“Nevertheless, the attitude at director level was very blasé, with absolutely no sense of urgency because there was the feeling that there was still no pressure. They weren’t thinking about their Director’s responsibilities.

“The message is very simply - if HMRC are owed money they will be taking action to recover it.

“While a smaller creditor might decide not to waste £5,000 in legal fees trying to reclaim an outstanding debt, HMRC will not be so understanding.

“That’s why the best thing to do is to face reality and seek the advice that could stop a cash crisis turning into a financial disaster.”

This was posted in Bdaily's Members' News section by John Highfield .