Thursday 23rd February, 2017
According to research by UHY Hacker Young £468m in extra tax was brought in from investigations into the tax affairs of small and mid-sized businesses last year.
UHY Hacker Young reports that as tax investigations into large businesses may be becoming less profitable, we could see HMRC shift some of its focus into investigating small and mid-sized businesses as it comes under increased pressure from the Exchequer to boost tax take.
On the other hand, small and mid-sized businesses could be affected by time and budgetary constraints, or a lack of financial experience when it comes to self-assessing their tax affairs, which could make them more prone to errors when it comes to their tax affairs.
HMRC has introduced two new directorates: 1) Wealthy and Mid-Sized Business Compliance and 2) Individuals & Small Business Compliance. These business units are responsible for clamping down on non-compliance by small and medium sized businesses.
The unit responsible for clamping down on non-compliance by small and mid-sized businesses last year brought in £470m of extra tax.
Roy Maugham, partner, says: "HMRC have been visibly gearing up for a crackdown on small and mid-sized businesses, and now their tax affairs are coming under greater scrutiny."
“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.”
"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."