Marked increase in tax investigation receipts
Accountancy firm, UHY Hacker Young, have obtained figures that show the tax recouped from tax investigations into small and medium-sized businesses (SMEs) rose by 31% in the last 12 months.
In the year ended 31st March 2013 compliance investigations into SME’s yielded £565 million compared to £434 million in the previous year.
The chancellor set a target of an extra £7 billion a year in additional tax revenues from compliance activity in the 2010 Spending Review and according to Roy Maugham, Tax Partner at UHY Hacker Young, “small businesses are bearing the brunt of HMRC’s tougher approach to tax investigations.”
Maugham attributes this to “small and medium-sized business 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.” He went on to say, “That also means they are in a weaker position to negotiate over allegation of underpaid tax than a big corporate.”
A timely reminder therefore to those businesses that do not have any type of tax enquiry insurance that now would be a good time to acquire such!
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