Fee Protection Service
Small and medium enterprises (SMEs) are blamed for over half of the UK’s tax gap. The tax gap is the difference between the amount of money HM Revenue & Customs (HMRC) actually collects and the amount it believes is due. HMRC believes the current tax gap is £36bn and SMEs are responsible for £18.3bn of it, partly by failing to take reasonable care to ensure their accounts are accurate.
In future years, HMRC hopes that moving to quarterly reporting under the new Making Tax Digital regime will reduce the number of mistakes made, but what is it doing now to reduce the tax gap?
- Data gathering and analysis. HMRC has built an Enterprise Data Hub to collate and interrogate all the data and information it receives from other Government agencies, like the Land Registry, alongside other external sources such as banks and building societies. This is going to help HMRC identify suitable cases for in depth investigation.
- Scrutinising card transactions. Sales of £400bn a year are made via card and HMRC intends to exploit this data to check the accuracy of accounts submitted by SMEs and the turnover figures in particular.
- Increasing the number of specialist enforcement and compliance staff it employs. In March 2011, HMRC had 25,475 staff doing this work. By the end of March 2016 that figure had risen to 26,798, an increase of over 1,300.
The UK’s 5 million plus SMEs can expect to be the target of reviews and enquiries over the coming year as HMRC looks to reduce the tax gap and deliver £27bn of enquiry generated money into the Chancellor’s coffers.
Our Fee Protection Service is designed to provide our clients with protection against the fees arising from professional representation during such an enquiry. If you are chosen for review we will be able to:
- Respond to HMRC on your behalf.
- Deal with all correspondence.
- Prepare and defend your case.
- Negotiate the best possible outcome for you.
Please contact Sue Stephens, Tax Partner, if you are interested in learning more about this service and the support we provide to our clients.