THE SMALL BUSINESS BLOG

Is this an example in cash-flow planning, small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Personal businesses can only learn from?

If you owe money, but don’t pay it, as in this case for over 3 month (90 days), then you create positive cash-flow for your organisation. This “loan” from your creditors, can then be used to fund other activities, like wars, NHS shortfalls or promised tax cuts – could be an election soon.

But you need a good excuse to explain to all your creditors why you can’t pay them on-time, “the check is in the post” is so old, nobody goes for that anymore. HMRC has now come up with a slightly modified version of it:

“…HMRC says that due to the large number of claims for a cheque payment by employers who are entitled to receive the PAYE e-filing incentive, it is taking it longer than anticipated to deal with them…”

If that is not good enough, lets create some barriers to any complaints and that goes like this:

“We are very sorry for the delay. We want to assure you that we do have your claim in hand. We will get back to you. There is no need for you to contact us again. We cannot make a cheque payment if you have any PAYE returns outstanding. And we will clear any amounts of PAYE outstanding before sending you a cheque payment for any balance remaining. So to get your tax-free payment in full, you must send any outstanding returns and payments as soon as possible.”

This is a brilliant move, first the excuse, then do not contact us, followed by if you owe anything we need to deduct it – which will cost time as well – excellent strategic planning.

Bootstrapping at it’s best – wonder if they run seminars on this? You could not use this tactic with HMRC – only with creditors who can’t really do anything about this.

Hat-tip to accountingweb.co.uk

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