HMRC’s debt-collecting arm – Business problems shared are problems halved

HMRC's debt-collecting arm. Four £20 notes and one £10 note falling out of an open wallet.

Constructive action

When the recession hit the construction sector, one historically profitable small family firm faced a dramatic dip in profits and cash dried up. When Finton Doyle was asked to help, we transferred the old partnership into a limited company. This was an efficient tax planning measure. However, it was also a strategic step to protect personal family assets if the worst should happen. It became clear that when the construction company was formed, a paperwork mix up at HM Revenue & Customs (HMRC) meant PAYE liabilities were left in the names of the old partnership. This was compounded by missing PAYE payments due to poor cash flow. Payment was demanded personally from the director/shareholders by HMRC’s debt-collecting arm.

Removing psychological stress

Faced with trying to run the company during recession, dealing with unhelpful tax officials and worrying about their personal assets, the directors were under enormous strain.

As soon as we became aware of the situation, Finton Doyle took control. We recognised that easing the tremendous psychological pressure would allow the owners to concentrate unhindered on running the company. As accountants working closely with the business, often on a daily basis, we were able to break this problem down quickly into component parts, with each one to be resolved in turn.

Long-term action plan

Firstly, HMRC’s debt-collecting arm was told that the situation was being managed – they confirmed their recovery action would be suspended. This bought valuable time in which the other problems could be tackled.

Secondly, we resolved the misallocated liabilities, sorting out the paperwork so that any tax debts were held in the limited company. This gave the owners protection for their personal assets.

Finally, we were able to assist in raising finance to meet outstanding liabilities. In consequence, the family business is now able to face new economic conditions.

Key actions

  1. Broke the problem down into smaller, manageable parts
  2. Provided HMRC with missing information
  3. Assisted with raising new finance

Key results

  1. Client able to concentrate on running the business
  2. Collection action suspended while the problems were resolved
  3. Injection of new cash helped company onto a firmer financial footing

Do you need help? Don’t worry! Check out our services.

This site uses cookies. Privacy Policy

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.