Running foul of Her Majesty’s Revenue Collection (HMRC) may have some serious consequences. According to Daniel Hunter of the Free Business Thinking website:
The additional tax yield received from compliance investigations into small and medium sized businesses by HMRC has jumped 31% in the last year
Compliance investigations into SMEs raked in £565m for HMRC in 2012-13, up from £434m in 2011-12 (year ending March 31).in the 2010 Spending Review, the Chancellor of the Exchequer set a target to net an extra £7bn a year in additional tax revenues from compliance activity.
“Small businesses are bearing the brunt of HMRC’s tougher approach to tax investigations. With an ambitious target set by Chancellor to bring in billions of pounds through additional compliance, HMRC is desperate to squeeze as much money as they can from businesses who may owe tax.”
“With far smaller budgets than larger businesses, SMEs are often less likely to have accountants to manage their finances, making them prone to mistakes when filling in returns and therefore an easy target for HMRC.”
Bristol taxpayers might be alarmed at the high rate of tax yield. The city recently allowed the use of the Bristol pound to ensure secure cashflows for local small and medium enterprises as part of efforts to sustain one of the country’s most vibrant economies. With the government’s efforts to increase revenues for various public services, it is important for Bristol bookkeeping experts like those at Wormald and Partners Chartered Accountants to ensure all numbers are in order.
According to the article, special taskforces from HMRC have been working on compliance investigations, netting “over £60m in additional revenue already.” One of these groups reaped “£25 million” working the fastfood industry. Another taskforce geared to enforcing compliance from small businesses in South Wales’ holiday industry were “expected to bring in £2.5million.”
An expert bookkeeping service will have various functions to help establish a client business’ finances. These include engaging a Bristol payroll account, full accounting services to keep track of operational expenses, and assisting the business with registering with HMRC.
Ensuring that a business pays the proper tax amounts to HMRC on time keeps a compliance investigation taskforce from knocking on your door. As such, firms like Wormald and Partners will be valuable assets to taxpayers like you.
(Info from HMRC Tax Yield, FreeBusinessThinking, September 24, 2013)