Oversight leads to rich pickings for taxman.
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.
New research shows one fifth of businesses with a turnover of more than #1m have never thought about auditing their payroll and expenses procedures, or have done so infrequently that they could fall foul of an Inland Revenue compliance visit. The news comes on the first anniversary of the new offence of tax fraud, a year that has seen the Revenue beef up its compliance units.
Of those that had carried out an audit, nearly a quarter found they had liabilities of between #5,000 and #500,000.
The research was carried out by Cevas Data Systems. Chief executive Ashley Whittaker 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. I strongly advise businesses to consider a rethink on their audit policies,’ he said.
Cevas interviewed managing directors, finance directors and other senior managers of businesses with a turnover of between #1m and #100m. The research also showed that 14% only reviewed their systems after the taxman had paid a visit.