News and events / news

HMRC likely to step up investigations into SMEs and individuals - Annual Tax Gap figures announced

  • 15 Jun 2018
  • Author: Kevin Igoe, Managing Director, PFP

HMRC is likely to come after SMEs and individuals to boost their tax take after new Tax Gap Statistics reveal they are responsible for more than half of the UK’s £33bn underpaid tax.
 
The new figures* released by HMRC show:

  • Small businesses and individuals are thought to have underpaid a combined £17.1bn of tax in 2016-17, out of a total £33bn.
  • HMRC thinks 22% of SMEs are filing incorrect tax returns.
  • The underpayment of personal taxes has increased by 17% in the last year, up from £2.9bn in 2015/16 to £3.4bn in 2016/17.

These latest estimates mean that HMRC once again is likely to ramp up investigations into SMEs and individuals.
 
That’s unfortunate as HMRC has long made a habit of targeting small business and individuals as they have fewer resources to defend themselves.
 
HMRC’s low opinion of tax returns from small businesses means that around a fifth of SMEs are at immediate risk of tax investigations.

*https://www.gov.uk/government/statistics/measuring-tax-gaps-tables