Wednesday, December 6, 2023

Thurrock businesses warned: Tax inspections on the increase

BUSINESSES from Thurrock have been warned to expect an increase in inspections by HMRC as the Government tries to balance its books.

The warning was given at an Essex FSB (Federation of Small Businesses) Voice of Business Briefing held at Thurrock Centre for Business this week when Murray Fairclough of Abbey Legal Services was one of the speakers.

South West Essex FSB Branch Vice Chairman, Alan Jefcoate, said: “The statistics given by Abbey Legal Services were frightening showing that HMRC is increasing the number of tax investigations of small businesses it undertakes each year.

“The figures show that:
Average duration of an investigation was 17 months
48% of cases resulted in no further liability
57% of cases resulted in settlements of less than £500

The average settlement was £8,300

In 2008 the Inland Revenue reported a cost to yield ratio of £1:£8. In 2009 this increased to £1:£10. They have declined to publish the results from 2010 onwards

40% of investigations handled were into businesses with turnover below £150,000

Less than 16.5% into businesses with a turnover greater than £500,000

70% of investigations into businesses with declared profits of less than £25,000

“These figures all suggest that the Inland Revenue are targeting small businesses for investigation seeing them as an easy option for revenue generation for the Government.

“Imagine the disruption to a business and the stress for the owners when an HMRC investigation takes an average of 17 months only to find there is no liability for the company concerned.

“Businesses need to make sure that their tax records are kept meticulously and that they get impartial advice – the FSB’s Legal and Tax Advice Call Centre takes more than 1,000 calls per day from our 200,000 members who have unlimited access to the service within the cost of their annual subscription, which starts at £120. That demonstrates the high demand for guidance on these complex matters and we would urge all businesses to be ready for when the taxman calls.”


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