A recent study shows that small businesses are being targeted by HMRC as a result of pressure to collect billions more in taxes.
An accountancy group, UHY Hacker Young, revealed that during the 2016/2017 tax year, a staggering £474m was collected from SMEs in the UK.
The focus on smaller businesses led to a five per cent increase in the amount of cash collected in the last tax year, it is reported.
A UHY spokesman has said that small businesses are in the spotlight for investigations because they are considered “an easier target than many larger businesses”.
Roy Maugham, a tax partner at UHY, described the singling out of SMEs as ‘unfair’.
“The cost of tax inquiries for SMEs can be high, and the investigations disruptive.” He said. “Small companies may not have the necessary resources to bounce back.”
The singling out of smaller businesses could be because HMRC are under pressure to close the gap between what they are meant to collect and what they actually bring in.
Official reports have estimated that the “tax gap” stood at £3.7bn for the tax year 2014/15.
Indeed, earlier in the year, we reported on HMRC's shift in focus from larger businesses to sole traders and microbusinesses, and unfortunately for the self-employed, the targeting shows little signs of stopping.
Maugham advised small business owners that: “Without care, businesses are at risk of being pulled up over minor mistakes…which could incur disproportionately heavy fines and penalties.”
He went on to say that SMEs should do all they can to avoid mistakes on their returns.
Late returns can also result in fines, so it’s important to be clear on upcoming tax return deadlines.
Have you been penalised by HMRC? Sound off in the comments.
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.Start your quote
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
22 June 2020 • 9-minute read
How to start a clothing business. It can be an all-consuming process but with that first sample run and customer sale comes great…
19 November 2020 • 2-minute read
Landlords could be hit by another massive tax raid, as the Office of Tax Simplification outlines its recommendations for an overhaul of…
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.