Corporation tax arrears up 15%
20th December 2016
The total value of corporation tax payments in arrears has risen 15% in the past 12 months, according to Funding Options.
This represents a total of £1.82 billion in late payments, up from £1.59 billion.
The main factors affecting companies' ability to meet their tax obligations include:
- HMRC using more aggressive methods to recover overdue tax
- smaller companies have had their bank overdrafts cut by £5 billion (37% of the total).
A potential Brexit-related economic slowdown could see companies encountering cashflow problems as customers delay payments.
Research by Bacs Payment Schemes Limited shows that 47% of small to medium-sized businesses are being paid late. The average late payment debt stands at £32,185.
Conrad Ford, CEO of Funding Options, said:
"These figures demonstrate the growing pressure on cashflow for companies, which could get worse following the outcome of the EU referendum.
"Businesses need to make sure they have the adequate funding to pay tax bills on time, without taking capital from other areas of the business."
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