HM Revenue & Customs (HMRC) is putting further pressure on small- and medium-sized enterprises (SMEs) amid its crackdown on VAT evasion, collecting an additional £3.4 billion from SMEs for the latest tax year.
“It’s clear from the high tax take that the Revenue has found investigations into SMEs to be fruitful, and therefore it is likely that this focus on smaller organisations will continue,” commented Kevin Igoe CTA, managing director of tax investigation insurance company PFP, as quoted by the Daily Mail.
Igoe – who worked at HMRC – said SMEs must make sure they are filing their returns correctly to avoid hefty fines. According to the report, HMRC inquiries can be costly and disruptive for small businesses which may lack contingency plans or specialist cover in the event of such probes.
“VAT can rake in a lot of extra revenue and therefore the taxman is prepared to use all means at its disposal,” added Igoe, who has seen over 18,000 HMRC investigations and enquiries.
He said over the years the HMRC “has widened its net – cracking down on smaller businesses,” in addition to larger firms.
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