Smaller firms to be targeted as taxman steps up scrutiny
BUSINESS owners are being warned that HM Revenue and Customs is stepping up scrutiny of smaller firms' tax affairs.
New figures show that HMRC collected 40% more revenue in tax and fines from smaller businesses in the last tax year as it steps up its efforts to clamp down on tax evasion.
According to the latest research, HMRC investigations into smaller firms produced an extra £434 million in tax and fines in 2011-12, compared to £311 million in the 2010-11 financial year.
Lisa Richards, partner at Derby-based chartered accountant and business adviser Dains, said: "In many cases, smaller businesses simply do not have the resources to deal with a tax investigation, meaning that demands for extra tax go unchallenged.
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"This, in turn, effectively makes smaller firms easier targets for HMRC than larger firms.
"If you are the subject of a tax investigation then it is important to seek professional help at the earliest opportunity.
"However, now is the time to ensure your company's tax affairs are in order, rather than waiting for the taxman to come calling."