Tax “task forces” add to burden on small business
As the Government continues to tighten the national finances smaller businesses are bearing the brunt of increased probing by the tax man, according to a Tranter Lowe Chartered Accountants.
HM Revenue and Customs is pouring resources into specialist teams to investigate various methods of tax evasion.
Philip Lowe, a partner at Tranter Lowe, said recently formed “task forces” were now looking into specific trade sectors and had already targeted restaurants, construction firms, property landlords, scrap metal dealers and fast food outlets.
In addition, evidence is emerging of HMRC piloting blanket investigations in specific regions to establish the expected profitability of a given sector, before widening the scope and using that information as a baseline to look for discrepancies in the records of similar businesses.
These measures come on top of controversial Business Record Checks that HMRC is pursuing, which involve two Revenue officers conducting an intensive question and answer session with the target business, followed-up with detailed scrutiny of the business records. Although not technically a tax inquiry, this approach has been likened to that formal process but without the strict rules of engagement that Revenue officers must follow as part of an official inquiry.
Phil, who runs Tranter Lowe's Dawley office, in Telford, said: “No-one can condone tax evasion, which is clearly illegal, and it is in the whole country's interest for due taxes to be collected. However the approach we are seeing now can be hugely disruptive to honest businesses which can hardly spare the time for detailed and stressful inquiries. Any business person who is contacted by one of these “task forces” or told they are to face the Business Record Checks process, would be wise to involve their accountant immediately because they understand the system and how to approach an inquiry. This can help to avoid a prolonged and disruptive investigation.
“Individuals and companies who are in any doubt about the state of their records and whether they could satisfy probing tax inspectors should seek advice now on ensuring their house is in order. It could be the best move they ever make to protect their business.”
