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Fully 667 large businesses have been forced to defer tax payments worth more than £750,000 during lockdown, says accountants and business advisers, Moore.
A growing number of businesses have had to enter into time-to-pay arrangements, but many may still struggle to pay their tax bills in the future if their cashflow has not improved by the new repayment deadlines.
Suppliers and other lenders to businesses in this position could also face problems because HMRC’s status as a preferred creditor will be reintroduced from 1 December. It had previously been removed by the Enterprise Act 2002.
After HMRC is reintroduced as a preferential creditor, if a business that has entered into a time-to-pay arrangement goes insolvent, HMRC will be repaid outstanding ‘collected taxes’ – such as PAYE, National Insurance and VAT – ahead of most creditors.
