0800 644 6080
Call FREE from Landline and Mobile
Est. 1989

SME VAT Enquiries Bring HMRC an Extra £3.5 Billion

Written by: Keith Tully

Reviewed: Monday 29th February, 2016

SME VAT Enquiries Bring HMRC an Extra £3.5 BillionEnquiries 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.

Keith Tully

Author
Keith Tully
Partner

Join Keith Tully on Linked In Join Keith Tully on Google Plus Follow Keith Tully on Twitter

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

Meet our Team of Experts

Who we help

  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships

Contact our team

Jonathan Munnery
Gillian Sayburn
Julie Palmer
Processing...
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors

Free Guide for Limited Company Directors

Business Rescue Advice for Directors

  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Desling with your Insolvent Clients

Business Rescue Guide for Accountants

Dealing with your Insolvent Clients

  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download

Our numbers speak for themselves

75
Number of UK Offices
30000
Directors Helped
70+
Licensed Insolvency Practitioners