HMRC’s new real-time information system, calls time on end-of-year reporting.
In April this year, HM Revenue & Customs will be introducing a new system which requires all employers who operate a PAYE scheme to report PAYE payments as they fall due, rather than at the end of the year.
The new system aims to reduce paperwork and administration for employers and enable them to monitor payments and react more quickly to non-payments. However, it is likely to have an immediate impact on the cash flow position of many employers, particularly those in financial difficulty.
Distressed businesses, that have survived almost four years of the downturn, eroded all of their reserves and who have inadvertently used Crown payments as a source of funding, are particularly vulnerable.
These changes mean that HM Revenue & Customs will have a much better indication of those employers failing to make payments, therefore it is important that those businesses act decisively now to ensure that they can make payments.
Stephen Wainwright, Partner at Poppleton & Appleby, states: “I cannot stress too strongly how important it is for directors and business owners to seek assistance as soon as they realise that they are running into a financial problem.
“While seeking the advice of an Insolvency Practitioner is often considered a last resort, an early initial consultation costs nothing yet provides the best prospect of avoiding a formal insolvency procedure.”