London SMEs warned to be watchful over tax

Small business owners in London have been warned to check their tax returns and record keeping, following research that suggests they are being targeted by HMRC.

An estimated £3.4 billion in corporate tax was collected from SMEs in the 2016/2017 tax year following investigations and Clear Books has claims small firms should be “concerned” by the outcomes.

A number of financial penalties can be imposed by HMRC if they feel a business has understated earnings or tax liabilities, either knowingly or unknowingly.

It’s possible for HMRC to backtrack through several years of statements, which can be a time consuming process for the company’s involved as they will need to take time to comply with the investigation.

Small businesses can feel the impacts of investigations to a greater extent than their larger counterparts, often as they lack the specialist knowledge and finances to deal with the situation correctly.

Larger firms meanwhile often have the finances to afford in-house specialists and tax teams to help them deal with tax liabilities, alongside significant cash reserves to cover any unpaid bills.

Seeking advice is key for small firms, while a wide range of support is available to assist businesses experiencing unpaid tax, VAT or PAYE arrears.

HMRC Time to Pay services can help should a business face winding up petitions, the threat of bailiffs or potentially unfair penalties.

Swift action can help to ensure the most desirable outcomes for businesses, as acting early can increase the number of possible methods that can be used as solutions.

Clear Books have highlighted the need to keep detailed records and accounts and warned firms to be watchful over what could be claimed as expenses in order to reduce profit and therefore tax liabilities.

A number of alternative finance options also exist to help businesses grow or overcome short-term financial difficulties.


By Phil Smith


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