Company Tax Problems - HMRC Tax Advice

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Company Tax Problems

Many companies experience tax problems every year, with thousands just struggling to meet payments.Tax arrears for unpaid taxes can soon mount up and can grow for a variety of reasons.

Why do Tax Problems Arise?

Tax problems can arise for many reasons, but usually occur because of cash flow difficulties.

When financial commitments to pay employees, suppliers and utilities are accommodated for, there's often little or nothing left to fulfil tax requirements. Discovering that you have company tax problems is usually a sign that there are bigger issues within your business that need to be addressed.

Some of the most common causes of tax problems include:

  • Poor advice from financial advisers.
  • Inadequate accounting procedures and systems.
  • Tax calculation errors.
  • Incorrect practice of VAT schemes.
  • Delays in receiving VAT registration and/or tax clearance for new businesses.

Repayment of your outstanding tax arrears will rectify the situation.

Causes of Company Tax Problems

The causes of a company's tax problems are often down to a fault within the business structure or business plan.

Quite often, there will be deep rooted liquidity problems within the business that need addressing in order to provide financial relief.

Some of the causes may include:

  • Over-trading.
  • Management team weaknesses.
  • Disorganised operations.
  • A difficult or problematic sector.
  • Underinvestment.
  • Key business decisions made on the basis of untimely, inaccurate, or unreliable information.
  • Internal theft or fraud.
  • A loss of credit insurance.
  • Withdrawal of facilities and backing from creditors.
  • Poor planning on major strategies.
  • A one off event such as fire, departure of key staff, and bad debt.

Avoiding Tax Problems

Tax problems should never be avoided or ignored, because they'll never go away. Making tax payments on a regular and timely basis will help to prevent your tax liabilities from becoming too large and unmanageable.

Failure to Pay Tax Arrears

If your company tax problems are such that you are unable to pay your tax debts and have no viable means of meeting the debt repayments you may face County Court Judgements, bailiff action, followed prosecution and compulsory liquidation. As the consequences are so drastic, it's crucial that your tax debts are addressed as soon as possible.

Tax Payment Plans

A tax payment plan could be just what your company needs to overcome its tax problems. HMRC will want to recover their tax debt, and if you can prove to them that your debts can be cleared through a structured and dedicated payment plan, clearing your tax debts could be easier than you'd thought.


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This website has been written and intended for registered limited companies in the UK only. The site contains general information and resources for limited companies only in financial trouble. Insolvency Helpline only work with limited companies to offer solutions for their business debt problems. Insolvency Helpline cannot offer help or advice any other entity except limited companies. Insolvency Helpline does not advise individuals, sole traders or partnerships seeking debt advice. If you are an individual, sole trader or partnership seeking advice, we recommend using an alternative service.

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