Small businesses bemoan ‘intensive’ HMRC tax probes
More than half of small businesses involved in HMRC tax investigations believes they are too intensive, new research shows.
Insurer PfP has reported that 52% of firms believe the process to be too intrusive, with the disruptions potentially causing issues for the small firms given the size of the legal fees that are required.
Some 56% of businesses said they believe HMRC does little to minimise the cost, time and effort requirements that accompany the investigations.
The research, commissioned by HMRC, suggests that small businesses are unhappy with their treatment, especially as they can often lack the resources to manage the situation they are faced with effectively.
HMRC revealed in June that 41% of its tax gap comes from small businesses, with large businesses accountable for 21% of the total.
Of an estimated total gap of £33 billion, small firms are responsible for around £13.7 billion.
This gap relates to the levels of tax that are due to HMRC and to the amounts that are actually paid.
Given that small businesses have provided high levels of additional tax collection via HMRC investigations, it could put them in the spotlight for further investigations, according to PfP.
Businesses facing tough financial situations or decisions should seek advice on the most appropriate solution for their needs.
Ignoring tax liabilities can place unnecessary pressure on a company, especially when a range of services are available to assist with unpaid tax, PAYE arrears or VAT issues.
These can ensure that a business meets its liabilities when dealing with HMRC, while alternatively businesses could opt for refinancing options that can overcome cashflow issues, meet growth aspirations or provide a platform and strategy for the longevity of the firm.
By Phil Smith