Posts Tagged ‘HMRC


Do not bury your head in the sand

Sheffield based accountants Hart Shaw is urging business not to be complacent if they receive accelerated payment notices (APNs), after new figures reveal that the government has collected more than £1 billion through their use.

HM Revenue & Customs (HMRC) recently announced that it has collected more than a billion pound using APNs, since it was granted the new powers in 2014/15.

Under the accelerated payment rules, HMRC is able to make taxpayers pay disputed tax in advance, rather than waiting for the outcome of a tax tribunal ruling.

Once an APN is received taxpayers have 90 days to pay the outstanding tax, whether they feel it is due or not or face additional penalties. If the taxpayer wins the case the money is reimbursed to them with interest.

During the first year HMRC issued more than 10,000 notices to businesses or individuals who had used a disclosable scheme under the Disclosure of Tax Avoidance Schemes (DOTAS) rules.

Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw said: ““Receiving an APN should not be taken lightly, as it can have a serious effect on the liquidity and reputation of you and your business.

“The fact that HMRC have collected more than £1 billion, shows that they are serious when it comes to potential tax avoidance.”

Earlier this year, it was revealed in HMRC’s annual report on tax avoidance, that of the £596m received from APNs during 2014/15, some £28m was refunded after legal challenges.

“While many of those targeted by these new powers may have legitimately avoided paying tax, there will be some individuals and business who have been unfairly targeted and this is evident in the number of refunds already issued by HMRC,” added Christopher.  “Seeking professional advice sooner rather than later is critical.”

For more information please contact Christopher Brown on 0114 251 8850 or


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No business is immune from failure

The recent insolvency of the Rotherham based MTL Group is a timely reminder that no company, however large and high profile, is immune from failure. Administrators were appointed to MTL Group on 2 February 2015 with the immediate loss of 157 jobs and leaving creditors owed circa £10m.

The immediate effect of any insolvency is that creditors suddenly have a bad debt to deal with, and the larger the debt, the more likely that there will be a domino effect, causing otherwise solvent companies to have cash flow problems which could ultimately lead to failure. When the initial insolvency involves such a high profile company as MTL Group the risk of the domino effect only increases.

We are currently helping one of the creditors of MTL who has a large bad debt. Fortunately this company is financially sound but even so, the disruption to its immediate cash flow caused by MTL is such that we are currently negotiating with HM Revenue & Customs a time to pay arrangement for the current VAT Quarter. This will enable the Company to avoid penalties and make nominal payments until, over the next six months, it can claim VAT Bad Debt relief on the MTL debt and so satisfy the current VAT quarter.

Other Companies in less financial health may need to negotiate with their creditors generally and this is where an Insolvency Practitioner can provide valuable help. Of course this is dealing with the effects of a bad debt after it has happened. But what practical things can a Company do to lessen the effects of a bad debt before it happens?

The first thing is to know your customer, assess their credit worthiness and set a credit limit which reflects the commercial risk you are prepared to take, because were your customer to fail that is how much you stand to lose.  Once set, stick to it. We often see cases where although a credit limit was in place, the company has ignored it and gone on supplying the customer which has ultimately failed. If possible incorporate a personal guarantee into your credit application form, it may not always be possible, especially with larger customers, but it is worth trying. Finally consider credit insurance to protect against non-payment should a customer fail. The benefits of credit insurance are not only that the debt being insured would be paid, but that you will have access to improved credit intelligence on your customers.

If your require any assistance in dealing with your creditors or require further information about credit insurance please contact Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw on T: 0114 251 8850 or email:

Christopher Brown of Hart Shaw

Christopher Brown, Business Recovery & Insolvency Partner at Hart Shaw










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RTI adds extra burden to fragile cash-flows

With just two months to go before the implementation of Real Time Information (RTI) by HMRC, employers should be reminded that they need to update their payroll systems to ensure that they will comply with these new regulations.

RTI is a radical change to the way the PAYE scheme is operated and in summary is the submission of a report to HMRC of deductions made from employees’ wages at the point of deduction.  This change will give HMRC real time (hence the name of the scheme) and up to date information on each and every employer’s PAYE & NI obligations. This in effect involves the production of a mini P35 on a weekly or monthly basis depending on how often employees are paid, rather than just at the end of the financial year.

Many of the companies and businesses that we advise have fallen into arrears with their PAYE & NI payments and these arrears will have accumulated over a significant period of time. Under the current system, HMRC will not know the extent of any arrears until the submission of a P35 at the year end. Under the new system they will be aware of any arrears, and in particular increasing arrears, on a weekly or monthly basis.

The implementation of RTI and the introduction of a new penalty system could see HMRC taking a more proactive approach to the collection of overdue PAYE & NI payments. This could have the effect of further pressure being placed onto a company’s already fragile cash flow.

Time will tell if this leads to an increase in insolvencies due to HMRC issuing demands for payment and petitioning for the winding up of businesses for those none payers.

Companies and business owners therefore need to ensure that they are compliant with the new requirements from HMRC and should the situation arise that they are unable to meet the liabilities as and when they fall due that they take the relevant advice from their accountants or an Insolvency Practitioner.

Emma Legdon is a Licensed Insolvency Practitioner at Hart Shaw and can be contacted on T: 0114 251 8850 or email:

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