Firms resort to credit cards to pay bills

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RECORD numbers of cash-strapped businesses are resorting to their company or personal credit cards in order to pay their tax bills, according to figures obtained from HM Revenue and Customs.

As recently as 2005/2006 just 6,083 credit card payments, totalling £2.2m, were made to the Inland Revenue to meet PAYE, corporation and personal tax bills.

However, for the financial year ending March 31, 2010, this figure had escalated to 184,587 credit card transactions, totalling £485.92m.

This represents a 220-fold increase in the amount being paid on the ‘never-never’ – and lifts the lid on the true extent of the financial crisis facing struggling businesses. The figures were obtained under the Freedom of Information Act on behalf of the Debt Recovery team at Harrogate-based Ashworth Law.