Funding Options reports under a power known as “distraint”, HM Revenue and Customs seized business assets from 1,080 small businesses to settle late tax bills in 2014. “Distaint” allows HMRC to raid business premises without court orders, seize goods, and auction them. If the amount raised does not match the value of debt, HMRC can continue pursuing the business for the outstanding arrears.
An important date for sole traders, unincorporated businesses and partnerships is the 31st July. Self-assessment returns should be submitted and these small firms make upfront 50% payments of their annual tax liability. According to Funding Options, lump sum payments are needed in such circumstances, which can cause a financial strain on the business and therefore sufficient funding should be in place.