Written by: Keith Tully
Reviewed: Monday 29th February, 2016
Enquiries into potential underpayment of Value Added Tax (VAT) among small and medium-sized enterprises (SMEs) by HM Revenue & Customs (HMRC) delivered the UK’s tax-gathered body an extra £3.5 billion last year.
That’s according to the tax investigation insurance company PfP, which has been looking into the matter and found a sharp rise in VAT-related returns from SMEs.
The extra returns from VAT enquiries are said to have accounted for a 45 per cent rise in the amount of money gathered by HMRC’s local compliance teams for the tax year 2014/15.
As much as £7.7 billion was taken in the 12 months by those teams, which have responsibility for investigating the affairs of SMEs around the UK and their potential underpayments of taxes.
Expectations are that there will continue to be increases in the amounts of money being gathered by HMRC through its local compliance teams as the government-backed body continues its drive to clampdown on tax avoidance of any kind that can be identified.
However, PfP has suggested that for the most part SMEs always aim to pay whatever taxes they owe and are not deliberately trying to avoid paying taxes through VAT.
“A ‘hardcore’ of tax-evading small businesses are making life difficult for the vast majority of compliant SMEs, and leaving them facing investigations over genuine oversights and errors,” said Kevin Igoe, PfP’s managing director.
“SMEs need to be particularly wary of potential pitfalls when submitting information to HMRC and ensure they are on top of their accounts at all times,” he said.
With its aim of maximising potential tax revenues by any means possible in mind, HMRC is in the process of closing many of its tax offices around the country and replacing them with just 13 hubs, which will be home to various taskforces with specific tax-related remits.
HMRC has been widely criticised in recent weeks for failing to secure more in back taxes from Google after a lengthy investigation into its tax affairs and for its increasingly widespread use of Advanced Payment Notices (APNs), which oblige companies and service providers to pay disputed tax amounts in full on very short notice.
17th April 2019
HMRC applied to see more than 4,000 UK companies closed down over the course of 2018 and is being too aggressive in its pursuit of tax-related debts.Read More
12th April 2019
British high streets saw the sharpest rate of net store closures on record over the course of last year, according to a new set of figures.Read More