Tax time bomb ticks for business
Constantly changing tax regulations could leave British businesses with a ticking time bomb of unpaid taxes that only come to light after a visit from the taxman.
According to new research, one fifth of businesses with a turnover of more than £1m have never thought about auditing their payroll and expenses procedures, or have so infrequently done so they could fall foul of an Inland Revenue compliance visit.
Of those that had carried out an audit, nearly a quarter found they had liabilities of between £5,000 and £500,000 – potentially rich pickings for the tax authorities.
The research was carried out by Cevas Data Systems, an accounting systems and outsource provider.
Ashley Whittaker, chief executive of Cevas, said the tax situation could be very complicated, especially concerning expenses.
‘With regular changes in the rules it can be an uphill struggle to maintain adequate systems, procedures and policies – with 4,000 businesses claiming to never have thought about conducting an audit of their procedures, and 8,000 not seeing the need for one, I strongly advise businesses to consider a rethink on their audit policies,’ he said.
The research also showed that 14% of companies only reviewed their systems after the taxman had paid a visit.
The news came on the first anniversary of the new offence of tax fraud, a year that has seen the Revenue beef up its compliance units.
Whittaker said: ‘The behaviour of employers undoubtedly helps keep the revenue compliance teams busy.’
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