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.