Whilst Google was forced recently to again defend claims that it is not paying its fair share of UK tax – £11.6m of corporation tax in 2012 on sales of around £3.5bn – and Facebook appeared to pay no UK corporation tax in 2012, it would appear that small businesses are feeling the force of the taxman.
Compliance investigations into SMEs in 2012/13 resulted in a haul of £565m, up from £434m in the previous year, a crackdown on small firms that have not received anything like as much publicity as the calls for better policing of the tax affairs of multinationals, such as Amazon, Starbucks and Google.
In 2010 the government spending review targeted £7m in additional from HMRC compliance work as it is thought to be intent on grabbing as much of this as possible from small businesses – some 40 specialists ‘taskforces’ have been set up since to investigate specific sectors or types of tax payer.
Meanwhile, the backlog in tax tribunal cases has reached a record high – perhaps no coincidence. The number of outstanding first tier tribunals has doubled in the last four years to 26,965 and the time taken to resolve cases adds greatly to the uncertainty and delay for those businesses involved.
With small businesses firmly on HMRC’s radar, it is important to make sure their tax affairs are well and truly in order and that they have access to good quality professional advice.