SMEs under the microscope

It’s a startling statistic. One in ten of the UK’s small businesses is under investigation by the taxman – equivalent to more than half a million at any one time, according to official figures.

Parliament’s Treasury select committee heard from HMRC about its sharp focus on SMEs earlier this year. According to its figures small businesses are responsible for 46 per cent of the UK’s £33bn tax gap.

Against this backdrop there’s little wonder that some small business owners and managers believes the sector is being singled out unfairly.

Recent research has also revealed that more than half of the country’s SMEs think that HMRC’s tax investigations are too intensive.

And 56 per cent of those quizzed did not think the taxman attempted to minimise the cost, time and effort involved in dealing with those inquiries, according to the study by specialist insurer PfP.

HMRC has dismisses the criticism. It says it treats all businesses fairly and consistently. And it adds that it doesn’t fine anyone if reasonable care has been taken in completing a tax return.

But there is no doubt that tax investigations can be massively disruptive for small businesses.

They may have fewer resources to cope with the exercise. There is the time that needs to be spent managing an inquiry and co-operating with the inspectors, not to mention the potential cost in terms of professional fees.

WNJ has offered its clients a Tax Enquiry Fee Protection Insurance scheme for some time now.

Professional fees for defending clients in tax enquiries can be claimed under this insurance policy.

Clients in the scheme are also able to obtain helpful advice about the complex areas of Health and Safety and Employment Law.

The WNJ scheme, and similar ones that are available, can give people piece of mind and help protect them.

If you would like to discuss any aspect of this article or the Tax Enquiry Fee Protection Insurance scheme please contact me on 01772 430000

 

 

I manage the affairs of a portfolio of clients in a wide range of industries. In managing the audit and accounts department of WNJ, I always keep abreast of the latest technical information and legislative changes. Clients receive advice based on commercial awareness not simply historical reporting. Audit and assurance services for large range of clients, including charitable companies and pension schemes, Internal audit and systems reviews, Assisting and development of business start-ups.