There has been a tendency for some accountants (our firm is not one of them) to recommend to clients who are suffering cashflow difficulties, that they should just close their firm and restart in another name, as a method of avoiding their responsibility for paying their taxes. It is inevitable that some firms will encounter difficulties, but using this as a cash preservation strategy must be wrong.
Well the taxman now thinks the same; they have introduced a new programme called “Managing Serious Defaulters”, which includes focussing on those who use this less than ideal practice. If you want proper advice if your business gets into difficulties, then talk to us, the added value accountants.
Read what HMRC have to say: