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HMRC’s taskforces target small businesses

HMRC’s taskforces target small businesses

HMRC has increased tax revenues significantly in the year to April, when its investigators reclaimed £248 million in unpaid tax, a ten-fold increase in income since 2010.

HMRC’s tax investigators who trawl through billions of items of data to identify tax evaders in particular areas, have raised £540 million from sole traders and small businesses who have underpaid tax in the department’s five-year existence; and it would appear HMRC is not stopping there in its targeting of the SME community.

The team utilises state-of-the-art analytics software, making it virtually impossible for companies to cheat the system. Some of those targeted by HMRC taskforces last year included restaurateurs in South Wales and London-based taxi drivers, with more than 50 different industries investigated across the nation.

Jennie Granger, director of enforcement, HMRC, said: “Our expert analysts are at the cutting edge of developing and exploiting intelligence and smart data to tackle those who try to cheat the system.”

Granger insisted the tax authority’s message was clear, to “come forward now – if you don’t pay what you should, we will take action”.

HMRC’s stringent approach has been viewed somewhat controversially in certain quarters at a period when the Revenue has come under fire for failing to tighten its control over multinational companies.

But it would seem the authority’s approach to tax evasion in the UK is working, although HMRC remains tight-lipped about how much money each taskforce brings in individually.

The unit said: “Our taskforces cover a range of regions and businesses, but yield figures should not be considered the only measure of success.”

“Taskforce activity has a deterrent effect, discouraging those tempted to break the rules.”

HMRC claims it is able to flag areas that post the most significant “tax risk” using Connect: an £80 million system that feeds in data from 28 different organisations notably Companies House, the Land Registry, Benefits Agency and onshore and offshore banks.

This post is necessarily brief and is for general guidance only and does not constitute advice. You should always ask for specific advice based upon your own circumstances.

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