Accountancy and tax specialists The Accountancy Solutions have urged businesses to contact them after it emerged HMRC is targeting small and medium-sized enterprises for tax collection. An eye-watering sum of £474m was collected from SMEs in the UK during the 2016/2017 tax year.
This comes after HMRC shifted its focus on tax collection from larger corporations to smaller businesses at the start of the year in an effort to plug the tax gap; the difference between the amount of money HMRC is owed and what they actually collect.
Mr Aatif Malik, Managing director and Tax Partner at The Accountancy Solutions said: “The recent findings that HMRC collected £474m in tax from SMEs during the 2016/2017 is an increase of five percent on corporation tax collections from last year.
“It proves that HMRC is carrying on its strategy of targeting smaller and medium-sized enterprises in an effort to plug the tax gap. These investigations can be extremely disruptive to small businesses, and can often be much more costly than they would be to larger corporations due to the differences in turnover and resources.”
HMRC estimates that unpaid tax by SMEs represents around 51 percent of the tax gap in the UK, which was estimated to be around £36bn in 2014/2015. This is as opposed to 25 percent of the total being owed by large businesses, and is why HMRC is attempting to recover what is owed by excessively targeting SMEs for tax collections.
The result of the step-up in investigations by HMRC into small and medium-sized businesses means that more and more SMEs are now under increased pressure to spend valuable time and resources on ensuring their tax affairs are in order or risk heavy and potentially damaging fines.
Mr. Malik added: “Due to the nature of SMEs, they naturally have less people to look at their tax affairs and therefore less time to spend working on ensuring that their tax situation is correct and being done properly.
“Getting a tax payment wrong can result in disproportionally large and unfair fines to small and medium-sized enterprises which can have a serious impact on their business, as well as taking up a considerable amount of time and effort.
“It’s for this reason I’d like to urge all SMEs struggling with their tax situation or finding the time to complete their affairs properly to come to us and allow us to guarantee them peace of mind that their affairs will be looked after by our experts.”
The Accountancy Solutions has tax and accountancy experts in both its Birmingham and London premises. It offers an array of comprehensive accountancy services ranging from tax returns and inheritance tax services to financial accounting and HMRC tax investigation aid.
The company specializes in looking after the financial affairs of small and medium sized businesses, and ensures its portfolio of clients only pay back what they’re required to HMRC as well helping businesses claim back thousands in tax that they’ve overpaid to HMRC in the past.
For more information about how small and medium-sized businesses can avoid being targeted by HMRC, along with the range of other tax and accountancy services The Accountancy Solutions offers, please visit https://theaccountancysolutions.com/ or call 01216297768 (Birmingham) or 02070784001 (London).