HMRC’s continued aggressive approach to reduce the tax gap

HMRC are looking to close the tax gap – and small businesses are on their radar. The tax gap is the amount that should be collected by HMRC, and currently stands at £36 billion, although it’s at its smallest in more than ten years. Our Accountants in Bolton have certain procedures they can carry out to ensure you aren’t in HMRC’s sight.

The Government announced in 2015 that they intended to raise £5 billion from companies and individuals – therefore are actively pursuing businesses.

If you think your business is safe, think again – HMRC can investigate any business regardless of whether any fault or not. Even if taxes have been submitted correctly, they may still investigate your business. Our Accountants in Bolton can help by providing you with a full VAT health check.

Around 40% of uncollected taxes are because of; “Failure to take care reasonable care”, “Error” or a “Legal interpretation”, with only 27% of cases down to “Criminal activities” or “Evasion”.

If you consider your tax affairs as well-presented or in good order HMRC could still raise an enquiry about your business. They have various sources including “Connect database” which can utilise data from public and private sources to build a picture of your lifestyle.

HMRC’s approach is often particularly harsh. In a recent case that our VAT team were advising upon, we investigated and found that the rating applied by HMRC was particularly harsh.

After querying, and advising the client, it led to a reversal on areas of HMRC’s re-rating, and meant the client no longer having to pay back in excess of £100,000. At CHW our VAT specialist team can carry out full VAT reviews, VAT health checks or pre-inspection health checks to identify issues and disputes before HMRC step into investigate.

As a business owner this is a worrying time, as HMRC are on the hunt for anything to help reduce the tax gap. If they do come knocking, investigations can be extremely expensive – it’s important to make sure you’ve got tax investigation protection in place.

Our Accountants in Bolton can help to ensure you have the correct procedures in place so if and when HMRC come knocking you’ll be covered. Read more about our VAT health checks.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

Follow us

Tweets by @CHW-accounting

CHW-Accounting
@chw-accounting


Twitter: chw_accounting

Read enough?

Want to find out how we can help you and your business? Get in touch today and let's have a chat.

WHAT'S THE NEWS?

Grab a biscuit and a brew and read our latest news.

27 November 2019

A brief guide to claiming structures and buildings allowance

by

HMRC recently published new guidance on the structures and buildings allowance (SBA) following changes to the rules. This includes important information about how to claim it.


Read more >

18 November 2019

Leasing a car – how much VAT can you...

by

With a few exceptions, reclaiming VAT paid on the purchase of a car is notoriously difficult. By comparison though, the VAT position for leasing and similar contracts is more relaxed.


Read more >

11 November 2019

HMRC Enquiries – beware if you have a cash...

by

Even in this digital age some businesses remain heavily reliant on cash transactions. HMRC views these as high risk and as a result targets cash businesses with VAT enquiries, using special techniques to justify investigating them.


Read more >

6 November 2019

Did Making Tax Digital for VAT (MTDfV) pass its...

by

The first big deadline for MTDfV is history and whilst there was a fairly high failure rate, it was not as bad as originally feared.


Read more >

29 October 2019

Business property relief (BPR) don’t let it disappear

by

BPR shelters the value of your business from the HMRC. The trouble is though, when you retire from your unincorporated business, the relief disappears immediately. CHW explain how you can preserve it.


Read more >

YOUR CHALLENGES

No matter what your challenge is, we’ve probably dealt with it before.



Need an Accountant?

Get in touch >


Need an Accountant?

Get in touch >


Tax issues?

Find out more >


Tax issues?

Find out more >


Trying to grow your business?

We can help >


Trying to grow your business?

We can help >


Managing cashflow?

We can help >


Managing cashflow?

We can help >


Starting a business?

We can help >


Starting a business?

We can help >


Looking for funding?

Need help with funding? >


Looking for funding?

Need help with funding? >


Buying or selling a business?

We can help >


Buying or selling a business?

We can help >


Adopt the cloud?

We can help >


Adopt the cloud?

We can help >


What else can we do for you?

We can help >


What else can we do for you?

We can help >
CONTACT US

Get in touch, no hard sell, just a brew, a biscuit and a chat.