Tax crackdown brings in £468m for HMRC
Investigations into the tax affairs of small and medium-sized businesses generated an additional £468m in extra tax for HMRC for the year ending 31 March 2016. HMRC are showing signs of beginning to exhaust yields from investigations into large businesses. Many small and mid-sized companies may not have been at the top of HMRC’s agenda in the past, but are now coming under the spotlight as easier targets. HMRC seem to think that SMEs could be “more prone to errors”, as they are often restricted by time, budgets and financial experience with regard to tax self-assessment.
There is increasing pressure on small and mid-sized businesses to spend their time and money on systems to ensure that tax affairs are accurate and up to date. Without adequate care, small businesses are at risk of being pulled up over minor mistakes or small disparities, which could incur disproportionately heavy fines and penalties.
Last year, the HMRC unit responsible for investigating SMEs’ tax affairs was split into two. One unit now focuses on wealthy and mid-sized business compliance, with the other concentrating on individuals and small business compliance.