(Image: Ron Wain of business news specialist Deep South Media)
Small and medium-sized businesses are being warned to prepare for an autumn cash flow crisis.
Azets, an accountancy and business advisory firm with an office at Triune Court in Monks Cross Drive, York, has highlighted the risk of financial strain due to three major tax deadlines in October.
This includes Corporation Tax on October 1, VAT returns on October 7, and PAYE Settlement Agreement payments on October 19 (postal) and October 22 (electronic).
Praveen Gupta, UK head of tax at Azets, said: "Many businesses are struggling with the increased cost of wages, supplies and energy, which is hitting their cashflow levels hard.
"There’s a real risk they could face an Autumn cashflow crisis when these tax bills are due if they haven’t put aside the money to pay them or thought about what they might do if they don’t have the funds to pay these bills."
Mr Gupta advised businesses to consider their options early, including borrowing from a commercial lender or arranging a Time to Pay (TTP) agreement with HMRC.
He added: "HMRC will consider repayment plans under a TTP for businesses that can’t meet their full Corporation Tax, VAT or PAYE payments – especially if you have the capacity to make a part-payment upfront."
Mr Gupta warned that ignoring the issue is not an option, as HMRC has taken legal action against businesses over unpaid tax debts since the end of the pandemic.
He said: "HMRC has been proactive in going to court to get companies wound up if taxes aren’t paid on time – and they don’t seem to be softening their approach, so firms who don’t pay their tax bills could face a court hearing and a winding up order."
Mr Gupta recommended that business owners maintain clear visibility of their cashflow and seek professional advice to avoid last-minute problems.