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HM Revenue & Customs has recruited the help of four debt collection agencies to claw back huge tax debts.

In the past year alone, the level of tax debts owed to HMRC has increased by 40 percent. The level has risen from £4.5 million to £6.3 million as a result of small businesses deferring their tax payments through the ‘time to pay’ scheme. This scheme was introduced during the recession by the Labour government in a bid to help businesses who were struggling to defer payments of tax and National Insurance.

However, despite the introduction of this scheme, many businesses were declared bankrupt leaving HMRC with millions owing in taxes. The amount of National Insurance contributions written off as a result of businesses being declared bankrupt saw an enormous rise of 78 percent, with the amount left owing in the last year being £920 million. As the government is responsible for topping up the national insurance credits of employees in the event of a company being declared bankrupt, this has been the largest cost to the Treasury.

With large amounts of tax and National Insurance left outstanding, and time limits approaching fast, many experts, including accountancy firms, fear that HMRC will use increasingly aggressive tactics to collect outstanding sums. For many businesses, a reputable small business accountancy will ensure that you keep within time limits set by HMRC, avoiding late filing penalties and interest charges. You will also have accurate records and stay up to date with payments.

About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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