HMRC clampdown raises £39.5bn – but at what cost?
HMRC tax investigations have yielded £39.5bn since its formation in April 2005, but small businesses are suffering under its ‘no mercy’ approach, argues UHY Hacker Young.
The firm says that HMRC’s stringent approach to compliance has resulted in a 64% jump in tax claimed back. CT enquiries into large businesses were cited as the most lucrative activity, raising £12.6bn in additional tax over the last four years. VAT interventions were also a prime source of cash, with a total of £10.4bn of extra tax raised since 2005/6.
However, small businesses are suffering under increased pressure from HMRC, argued Roy Maugham, tax partner at UHY Hacker Young: “Considering the relatively modest amounts of money that HMRC collects through self-assessment enquiries into SMEs you have to ask whether smaller businesses really deserve all the scrutiny they receive,” he said.
Non-compliance investigations into small businesses and the self-employed yielded £359 million of additional tax last year, a figure that has declined over the last two years.
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