HMRC has quietly changed its approach, making life tougher for UK company directors. Chris Worden explains what’s changed, why old tactics no longer work, and what directors must do now to avoid harsh penalties and enforcement.
- HMRC is enforcing tax rules more aggressively.
- Penalties and enforcement actions now happen faster.
- Director’s loan accounts are under greater scrutiny.
- Delaying or ignoring tax issues is riskier than ever.
- Early engagement and honest filing are essential.
How HMRC’s Approach Has Changed
Over the last 18 months, HMRC has shifted from patience and flexibility to rapid, strict enforcement. There have been no big public announcements, but directors are facing:
- Tougher penalties for late payments and filings
- Tighter timescales for compliance
- More data sharing and AI-driven cross-checks
- Faster escalation to enforcement action
Why Old Tactics No Longer Work
Previously, directors could sometimes delay tax payments or filings and negotiate time to pay arrangements. Now, HMRC reacts quickly to missed VAT, PAYE, or corporation tax deadlines. Delays, ignoring issues, or guessing your way through tax problems will likely result in:
- Unexpected tax bills and penalties
- Personal exposure for directors
- Rapid escalation to statutory demands or winding up petitions
Director’s Loan Accounts: A Major Trap
Director’s loan accounts are now a key focus for HMRC. Informal withdrawals, personal expenses paid from the business, or circular repayments can trigger Section 455 charges, benefit-in-kind taxes, and personal liability—especially if the company becomes insolvent.
HMRC’s Use of Technology
HMRC now uses AI and data sharing to cross-check VAT, PAYE, corporation tax, self-assessment, and Companies House data. Anomalies are flagged instantly, leading to more investigations and less tolerance for errors or delays.
What Directors Should Do Now
- Be honest about your tax situation. If you’re consistently behind, acknowledge the problem.
- File all returns on time, even if you can’t pay. Non-filing is worse than late payment.
- Engage early with a professional like Chris Worden. Early action can help set up realistic time to pay arrangements.
- Avoid turning company problems into personal ones. Don’t take dividends or sign personal guarantees if insolvent.
- Choose control over delay. If your business can’t recover, early action protects you more than waiting for HMRC enforcement.
Key Takeaways
- HMRC’s enforcement is faster and stricter than ever.
- Director’s loan accounts and late filings are major risks.
- Delaying action increases personal and business exposure.
- Early, honest engagement is the safest path.
- Chris Worden and the Director First team can help guide you.
FAQs
- What has changed with HMRC’s enforcement in 2026?
- HMRC now acts faster, with stricter penalties and less tolerance for late payments or filings.
- Are director’s loan accounts riskier now?
- Yes, HMRC is targeting informal withdrawals and linking them to personal tax liabilities.
- What should I do if I can’t pay my tax bill?
- File your returns on time and engage early with a professional to discuss time to pay arrangements.
- Can delaying tax payments still work?
- No, delays now lead to faster enforcement, penalties, and possible winding up petitions.
- How can Chris Worden help directors?
- Chris Worden and Director First offer guidance on dealing with HMRC, setting up payment plans, and protecting directors from personal risk.
Need Help?
If you’re a UK director facing HMRC pressure or tax arrears, contact us today for expert advice and support.
