HMRC collects billions in underpaid VAT from SMEs
3rd April 2017 | News
HM Revenue and Customs (HMRC) recouped a further £3.3bn in the last 12 months due to following under-payment of VAT from UK SMEs, according to PfP.
The figures cover work carried out by two newly-created HMRC teams – the Individuals & Small Business Compliance unit and the Wealthy & Mid-sized Business Compliance unit.
The eye-watering amount recouped by the tax authority indicates VAT is a key area of focus for HMRC as it seeks to maximise tax revenues for the Treasury. Kevin Igoe, managing partner, PfP, believes additional VAT investigations are sure to follow, with SMEs urged to get their tax affairs in order before they’re caught out.
“VAT investigations into SMEs have proven incredibly rewarding for HMRC. The figure will be driven by a combination of carelessness, genuine error or misunderstanding, as well as deliberate and calculated underpayment,” said Igoe.
“Whilst the vast majority of SMEs are compliant, the actions of a rogue few mean that HMRC is likely to look closely at the tax affairs of all over the coming months.
“Many innocent business owners are likely to find themselves under close scrutiny as the Revenue looks to weed out any remaining underpayment.
“It is therefore paramount tax records and systems are in order. Any uncertainty over when and how much VAT should be paid should be cleared up via professional advice, or clarification from HMRC itself.
“Tax investigations can be lengthy, costly and incredibly disruptive to businesses – particularly for those smaller in size, who are unlikely to have in-house tax specialists or ready access to the best guidance.”
If you are concerned about your business' tax liabilities, your local TaxAssist Accountant can help you get your finances in order. To arrange an initial consultation with your nearest TaxAssist expert, call us today on 0800 0523 555 or drop us a line using our online enquiry form.