The UK’s Business Secretary has stated that small firms faced with a mountain of debts caused by Covid-19 will not be pressured by HMRC to pay tax that they owe immediately.
Writing to the R3 business group and the Institute of Directors (IoD), Kwasi Kwarteng confirmed that HMRC has been told to show leniency towards smaller companies that are dealing with debts created by the pandemic. The government is keen to prevent as many of these firms from going under as possible, and being forced to pay taxes owed straight away certainly would tip many over the edge.
The owners of small firms throughout the UK are likely to greet the news with relief, as they already face the prospect of having to pay back Bounce Back Loans, as well as resuming rent and business rates payments.
Indeed, the latter has led insolvency specialists to predict that survival from next month will be tough for many small firms, although getting advice from a small business accountant in Goole or wherever they live could help.
In the letter that he wrote to the IoD and R3, Kwarteng states that he understands that many smaller firms will find it challenging to get back to a healthy trading position, especially if they are low on cash and heavily in debt.
The Business Secretary goes on to say that HMRC will only be allowed to force payments of tax sums that are owed through insolvency proceedings if every attempted measure to get a business back on its feet fails.