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New analysis of HM Revenue & Customs’ (HMRC’s) data has revealed that the department collected an additional £3.4 billion from small and medium-sized businesses in the tax year to April 2017.
Investigations in the 2016/17 tax year by HMRC’s compliance department saw 49 per cent of the additional revenue collected come from VAT investigations into SMEs – an increase of four per cent on the previous year, according to PfP who conducted the study.
In the last few years, the Revenue has doubled its efforts to crackdown on tax evasion perpetrated by SMEs and has expanded a number of its teams to help with the search.
Unfortunately, this has placed additional pressure on small businesses to get their affairs in order to avoid small mistakes, which could lead to costly investigations.
Alongside its investment in additional compliance staff, the Revenue’s new super computer, Connect, has increased its ability to find discrepancies after being given access to files held by banks and other financial institutions based in British Overseas Territories.
The system is also able to search social media and other less conventional sites to identify possible signs of non-compliance.
LINK: PfP Study into VAT evasion