Written by: Keith Tully
Published: 22nd August 2017
An HMRC crackdown on the underpayment of VAT among SMEs throughout the UK has brought in extra £3.4 billion for the Treasury.
That’s according to figures on the subject from the tax investigation insurance company PfP, which has warned that the UK’s tax-gathering authorities are determinedly targeting SMEs in pursuit of unpaid tax amounts and paying particular attention to VAT.
In fact, PfP says that very nearly half (49 per cent) of all extra payments made to HMRC following investigations into SMEs were made in relation to VAT.
That figure of 49 per cent for the 2016-17 tax year was up from 45 per cent during the previous 12 months.
HMRC is understood to be using a pair of taskforces, namely the Individuals & Small Business Compliance unit and the Wealthy & Mid-sized Business Compliance unit, to execute its crackdown on the underpayment of VAT among SMEs throughout the country.
PfP has said that HMRC views SME underpayment of VAT as potentially a very fruitful area of focus for its representatives who are collectively tasked with bringing in as much money as possible in tax revenues on an annual basis.
The suggestion that HMRC brought in an extra £3.4 billion in VAT payments from SMEs through its investigations last year is expected to see further attention paid and resources dedicated to the issue in future.
“It’s clear from the high tax take that HMRC have found investigations into SMEs to be fruitful, and therefore it is likely that this focus on smaller organisations will continue,” said Kevin Igoe, managing director of PfP.
“In order to avoid scrutiny from the revenue, SMEs must make sure they are filing their returns correctly, so as not to incur a hefty fine.
“VAT can rake in a lot of extra revenue for HMRC, and therefore the taxman is prepared to use all means at its disposal.”
Figures released in March of this year by Funding Options suggested that HMRC is also getting tough on SMEs when it comes to pursuing winding up petitions against companies in financial trouble.
The data revealed a 12 per cent increase between 2015/16 and 2016/17 in the number of small and medium-sized businesses that were hit with winding up petitions by HMRC.
13th April 2021
Around 40 per cent of all exporters from the UK have reported experiencing a downturn in their sales since the beginning of this year.Read More
8th April 2021
Retailers in the UK are generally against the idea of having customers be required to present paperwork as evidence of being vaccinated against Covid-19.Read More