SMEs are soft target for HMRC in tax crackdown
Tough tax goals set by the government is pushing HMRC to go after small businesses that are seen as easy targets, according to research carried out by UHY Hacker Young.
The mid-tier firm has found that the taxman collected £434m in tax and penalties for 2011/12, a 39% rise on its previous year’s figure of £311m.
Roy Maugham, tax partner at UHY Hacker Young, said:
‘Small businesses are more likely to make innocent errors in their tax calculations than larger businesses, meaning the small business community offers plenty of opportunity for HMRC.’
Maughan is concerned that small and medium enterprises (SMEs) are giving in too easily to the pressure applied by HMRC:
‘The other hidden cost to businesses is the amount of time it takes to deal with a tax investigation. An SME is also going to find it hard to afford a full time accountant to deal with or challenge a tax investigation so is more likely to concede, unnecessarily, to demands for extra tax. ’
‘Add this to HMRC’s tactic of sending multiple demands for additional payment for different taxes simultaneously to the same business, and small businesses can very quickly find themselves overwhelmed by the compliance burden.’
Published 22 October 2012
SOURCE: CCH Online