But fire sale of those assets raises just £41.6 million
HMRC seized assets from 1,953 businesses in 2016/17 as they use increasingly aggressive methods to obtain tax – up 23 per cent in the past year from 1,592, says Funding Options, the online business finance supermarket.
HMRC can use their ‘taking control of goods’ power to raid premises without warning, in order to seize assets and settle overdue tax bills.
The seizure of a business’s assets by HMRC that are crucial to its running, such as IT systems or machinery, can put firms seriously at risk of closure.
Funding Options adds that assets seized by HMRC are often sold at fire sale prices. Just £41.6m was raised in the last year through asset auctions, a relatively low value considering the disruption caused to businesses whose assets were seized.
Funding Options explains that the continuing rise in cases suggests HMRC is increasingly cracking down on small businesses failing to pay tax on time. Seizing assets is often seen as a last resort, as HMRC comes under more pressure from the Exchequer to increase tax take.
Conrad Ford, CEO of Funding Options, says: “In a worst-case scenario, having their assets seized by HMRC could be fatal to small businesses.
“HMRC is displaying that it is increasingly cracking down on small businesses with overdue tax bills, and won’t hesitate to use all the powers at its disposal.”