Small to medium sized businesses are being targeted by an HMRC bid to raise extra tax revenues for the government, according to national accountancy group UHY Hacker Young.
The accountants point out that £468m in extra tax was brought in from investigations into the tax affairs of small and mid-sized businesses last year.
It believes the focus on SMEs is as a result of tax investigations into large businesses becoming less profitable, due to the actions of in-house tax specialists at such firms, as HMRC faces increased pressure to boost tax take.
As part of its push, HMRC has created the Wealthy and Mid-Sized Business Compliance business unit and the Individuals & Small Business Compliance business unit.
Roy Maugham, tax partner at UHY Hacker Young, says: “There is increasing pressure on small and mid-sized businesses to spend their time and money on systems to ensure that tax affairs are accurate and up to date. Without adequate care, small businesses are at risk of being pulled up over minor mistakes or small disparities, which could incur disproportionately heavy fines and penalties.”
George Houston, senior technical and development manager at Mattioli Woods, agreed that large employers did often have the resources to shut down tax enquiries and that this was increasing focus on SMEs.
"Albeit while it will be a cost to companies, they should take whatever advice they can get on tax affairs," he said.
"They should try as best as possible to keep their tax affairs as straightforward and as clean as possible which is not easy in the current tax code, which is extremely difficult for SMEs to know everything about."
