An increasing number of sole traders, partners and company directors are seeking emergency finance to help them meet the January 31 tax deadline.
Some estimates suggest that the number of individuals looking for funding is around 100 per cent higher this year than last. All unincorporated firms will have to pay something on January 31. Depending on the nature of the firm's tax affairs, this may be all or half of the bill for the 2008-09 tax year, as well as the first 'payment on account' for 2009-10.
Many high-earning businesses, including some legal firms and accountants, choose to operate as partnerships and are therefore unincorporated. Similarly, tax bills can cause problems for those operating as sole traders.
While the number of firms and individuals seeking finance has increased, so too has the amount required. According to some reports the average request for finance has increased to around £450,000, from £200,000 last year.
Despite the Time To Pay scheme operated by HMRC, which is designed to provide businesses with a period of respite when they can show that paying their tax bill would cause financial difficulties, the taxman now expects firms to sell assets in order to settle their bill. As the public coffers are further depleted it seems likely that more severe measures will be used by HMRC to recover debts.
Firms facing difficulties paying their tax bills may wish to consider invoice finance or factoring solutions from a provider like Simply Business.
