Praveen Gupta, UK Head of Tax at international accountancy and business advisory group Azets, has warned that Kent SMEs could face ‘an autumn cashflow crisis’ if they don’t prepare properly for key October tax deadlines.

Many businesses face three key payment deadlines in October:

With high costs piling pressure on firms, Praveen warned they could face problems with cashflow and with HMRC if they didn’t have the funds to pay their bills or didn’t take the time to look at how they could pay them.

“Many businesses are struggling with the increased cost of wages, supplies and energy, which is hitting their cashflow levels hard,” he said.

“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.”

Azets has Kent offices in Maidstone, Ashford, Canterbury, Sandwich and Sidcup.

For firms worried about their cashflow levels and their ability to meet their payment deadlines, Praveen said that possible options included borrowing from a bank or commercial lender or exploring a Time to Pay (TTP) arrangement with HMRC.

“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,” he explained.

“These arrangements usually give you between six and twelve months to pay your outstanding debts, although that does depend on your circumstances and they will need to be satisfied that you’ll honour the arrangement.”

Avoiding facing the issue wasn’t an option, Praveen warned, as HMRC has pursued legal action over unpaid debts in recent years.

“Since the end of the pandemic, 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 be softening their approach, so firms who don’t pay their tax bills are could face a court hearing and a winding up order,” he said.

For directors who were worried about upcoming or future tax deadlines, Praveen recommended keeping track of cashflow levels and seeking professional advice to avoid being caught up in a crisis.

“You wouldn’t drive a car without a dashboard, and you can’t run a business without knowing what your key tax and payment deadlines are and how much cash you have available to pay them,” he said.

“Knowledge really is power – in this case, the ability to pay all your bills on time without running into problems.”

“If you’re worried about your tax position or your finances, the best thing you can do is speak to an accountant – they’ll be able to help you understand what you need to do, when you need to do it by and how much cash you need to hold back for key moments in the financial calendar.”

For more information about Azets, visit www.azets.co.uk

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