For most companies the prospect of a tax inspection, however minor, will always create alarm. Yet recent reports suggest that one in ten small businesses are now facing investigation by HMRC; which equates to half a million SMEs across the UK. This is a surprising, and somewhat worrying, statistic.
The argument for targeting small businesses in this way has come about following a total of £34 billion in unpaid tax faced by the Revenue in 2015-16. Following a report to the Treasury Select Committee, HMRC stated that small businesses contributed 46 percent of this tax ‘gap’, which has somewhat prompted the increased focus on this sector of the economy.
With an increasingly complex business tax system, and a centralisation of HMRC services, it could be argued that it has become more and more difficult for small business to keep abreast of current legislation, filing dates and statutory requirements.
Reassuringly we have historically experienced a low rate of active investigations into our business client’s affairs, and are currently dealing with less than 10 such investigations. Our diligence in ensuring that accurate tax returns are filed on a timely basis remains a core element of our efficient service, and with under 2% of our business clients experiencing such scrutiny, demonstrates the benefit of working with a team of knowledgeable tax professionals.
It remains that investigations can be expensive, so the timely filing of accounts will always help to ensure that unnecessary investigation can be avoided from the outset.