HM Revenue & Customs corporate asset seizures spike by 145 per cent

Oliver Gill
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The amount of overdue tax has spiked by 175 per cent (Source: Getty)

The taxman has cracked down on collecting outstanding tax from UK businesses.

The number of businesses whose assets were seized by HM Revenue & Customs (HMRC) in 2015/16 was 1,592, up a staggering 145 per cent on the prior year of 649 seizures.

The increase reflects the fact that amount of tax overdue hiked from £15m to £42m between the periods according to research prepared by Funding Options.

“With the stark rise in asset seizing it’s clear that HMRC are cracking down on those businesses with overdue tax bills,” said Conrad Ford of Funding Options.

Read more: When is the best time to call the tax man? This firm did the research

Tax authorities stressed that the majority of businesses pay on time and confiscating assets make up less than one per cent of calls from HMRC for payment of overdue tax.

“We have a very strong track record for supporting businesses with cash flow problems by agreeing time to pay and we remain entirely committed to this approach,” said an HMRC spokesperson.

Funding Options explained that the HMRC is entitled to seize assets and then sell them at auction. This often means that the money raised from the asset sales is lower than market value and can mean that companies can still end up owing more money to HMRC.

Despite the increase in the numbers of seizures, Funding Options stressed that asset confiscation was not a decision that was taken lightly by authorities. This was a sentiment echoed by HMRC.

“Asset seizure is a very last resort for us and only occurs in a tiny number of debt cases. Most businesses do pay the tax they owe on time and when those that don’t refuse to work with us we can ultimately be left with little alternative,” said an HMRC spokesperson.