Don’t Get a Red Card from HMRC
The firm line shown against football clubs by Her Majesty’s Revenue and Customs recently when tax bills fail to get paid should be a warning to all businesses.
Eight high profile clubs over the last few months have suffered the financial fate that thousands of businesses go through every year when VAT deadlines are missed, getting them into trouble with HMRC.
John Crawford, Managing Director of The VAT Consultancy explains: “HMRC treat every business the same, whether they are the biggest brand, support the local economy or play in the Premiership. The emotions of fans – or indeed business owners – mean nothing when tax payments are outstanding. This should be noted by any business that tries to reason with HMRC.”
Penalties Off the Pitch
Recently, Notts County FC have avoided administration at the last minute by negotiating a ‘Time to Pay’ agreement, which gives them an extended deadline to meet their tax liabilities. But without meeting the strict deadlines, HMRC will withdraw the agreement and opt for a winding up petition, signalling the final whistle for the football club.
Mr Crawford continues: “HMRC acts as the referee for businesses in every sector. They have the final decision and will not hesitate to firmly sanction you and what’s more, penalties are becoming harsher: they can be up to 100% of the unpaid VAT if you make an error.”
So, after a tough year all-round, what should business owners do to stay on the pitch?
“You simply cannot bend the rules when it comes to HMRC. However rules are only fair when both sides understand them. Directors, just like footballers, must stay informed and make good decisions and that’s not always easy when tax legislation is updated so frequently,” says Mr Crawford. “Planning ahead and getting good advice will make all the difference to ensuring that your company remains compliant and that your hard-earned profits don’t end up lining the government’s coffers. In short, proper tax planning is the only way to play the game and that’s where we can help.”
The VAT Consultancy comprises a team of specialists that offer expert VAT advice based on many years experience to FDs of businesses large and small. The company operates a telephone helpline and the option to send in a question online for fast responses.
For help with your VAT question call 01962 735350 or visit www.thevatconsultancy.com.