The number of UK businesses that have had equipment and assets seized by HMRC has risen by 145% in just one year.
It means the number of businesses whose assets were seized by HMRC in order to settle outstanding debts has gone up from 649 in 2014/15 to 1,592 in 2015/16.
The figures, obtained by Funding Options, suggest that more businesses are struggling to pay their overdue tax bills - HMRC tried to recover £42.6m of outstanding debt in the last year, an increase of 175% from the previous year where debts to the Revenue amounted to £15.3m.
Under a power called "taking control of goods", HMRC can seize assets in order to settle debts from businesses that have been unable to pay their overdue tax bills. Under the system, businesses are given seven days following a visit from a bailiff to pay their overdue tax before their assets are seized. The assets are then sold at auction in order to recover the money owed to HMRC.
Although this tactic is usually a last resort, the growing number of businesses who have had their assets seized suggests that HMRC is using increasingly aggressive methods to recover overdue tax. However, Funding Options points out that the seized goods often fail to achieve a good price and if they don't clear a firm's debts, that company is left with fewer assets as well as an outstanding debt.
In addition, Funding Options claims that small businesses are "particularly at risk" of having their assets seized because SMEs are more likely to have a volatile cashflow than larger businesses.
Conrad Ford, ceo of Funding Options, said: "With the stark rise in asset seizing it's clear that HMRC is cracking down on those businesses with overdue tax bills. Businesses must ensure they have sufficient funding in place to pay tax bills on time, without taking up capital from other aspects of the business.
"Often small business owners aren't aware of the many options available to them outside traditional bank lending," he added. This includes specialist products designed to finance tax bills. "With pressure on HMRC to increase tax receipts, it's becoming increasingly important that businesses make sure their tax affairs are in order and bills are paid on time."