At present. an employer deducts Income Tax from an employees wages and is supposed to complete a return and send that money to the Revenue. Some employers keep the money and invest it or even use it in their businesses and await demands for late payment. The employers, in effect, have a "loan" from the Taxman of the money that should have been paid. An employer will then make a payment and just keep going.
VAT is collected in a similar way with Employers holding the money until collection on a three month basis.
So an Employer can have three months VAT and Tax money to "play" with.
If thinks get totally out of control, deliberately or accidentally and an Employer cannot pay up the money then the Employer can claim Bankruptcy citing the Revenue as a creditor. In the case of a Limited company sales outlet this is done often. They simply open the next day under a new name. The "new" company buys the "old" stock and off you go !!!
This new system will ensure that the Revenue get their money weekly or monthly on time. Good thing for the country, makes little difference to employee who has it deducted anyway. Good anti fraud measure. Sorry, but this is a really good idea. Hope they put the money to a "good" use and not buy more bombs !!!
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