Business Advice

Is deferred tax the solution for company insolvency problems?

Many companies have postponed paying their taxes after the introduction of the tax different schemes. This is not a bad idea, but indicates that the financial health of the company is not right and hence something needs be done about it. It signifies the failure of the business itself. This is a commercial recovery method, and should be used in desperate situations. However many companies use this method in a hope that the situation would get better in the future, and that they would be able to run the business again. They hope that they will be able to pay the current as well as the outstanding task, once the economic situation improves. Such plans work well in the short term, but over a long term, they are disastrous. This is the very reason, why there is a splurge in the cases involving company insolvency.