SME tax investigations nets HMRC £565m in past year
Yield from investigations into SMEs' tax affairs up more than 30%
Yield from investigations into SMEs' tax affairs up more than 30%
THE TAX YIELD derived from HM Revenue & Customs investigations into the affairs of small- and medium-sized companies rose by 31% over the last 12 months, according to UHY Hacker Young.
Compliance investigations into SMEs generated £565m for HMRC in 2012/13, up from £434m in 2011/12, with the year ending March 31.
The 2010 Spending Review saw the chancellor set a target to net an extra £7bn a year in additional tax revenues from compliance activity.
Since then, HMRC has ramped up compliance activity with the launch of 40 specialist taskforces aimed at extensive investigation into businesses and individuals.
HMRC’s taskforces have raised over £60m in additional revenue already, with one taskforce focused on the fast food industry raking in £25m. In July 2013, a specialist taskforce tackling small businesses in the holiday industry in South Wales was launched, which is expected to bring in £2.5m.
UHY Hacker Young tax partner Roy Maugham said: “Small businesses are bearing the brunt of HMRC’s tougher approach to tax investigations. With an ambitious target set by chancellor to bring in billions of pounds through additional compliance, HMRC is desperate to squeeze as much money as they can from businesses who may owe tax.”
“With far smaller budgets than larger businesses, SMEs are often less likely to have accountants to manage their finances, making them prone to mistakes when filling in returns and therefore an easy target for HMRC.”
“That also means they are in a weaker position to negotiate over allegation of underpaid tax than a big corporate.”
More about:
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceAs the Spring Budget approaches, dissenters of the UK government’s increasingly complex contractor legislation are baying for change. HMRC has already...
View articleStricter controls on VAT compliance is set to shut down the “colossal” VAT tax gap. Read More...
View articleThere has been a percentage increase in the number of claims made by companies, but more needs to be done Read More...
View articleThe Targeted Anti-Avoidance Rule was introduced to prevent individuals lowering their tax liability by converting what would otherwise be a dividend i...
View articleIn 2016-17, the average length of time to settle a tax investigation rose to 34 months, up from 31 months in 2015-16. The tax authority has also incre...
View articleDiverted profits tax revenue collected by HMRC in 2016-17 totalled £281m, leaping from £31m collected in the previous year, according to data released...
View articleThe report suggests a wide range of reforms focussed on bringing together corporation tax and accounts, including creating five year roadmap for CT re...
View articleIn 2012, HMRC made 591 requests to foreign governments. In 2016, this number stood at 1096, a 7% increase on 1025 requests made in 2015 Read More...
View article