New data shows that HMRC’s tax take has been bolstered by more successful investigations into individuals and SMEs. The investigation units that focus on those small businesses and individuals collected £16 extra in taxes for every £1 spent on their investigatory staff in 2016/17, up on the £15 collected the year before.
To put this into perspective, investors in the stock market over the last 30 years have seen an annual return of 7.2%. HMRC’s investment into tax investigations is returning a remarkable 1500%.
The high returns that HMRC gets from these investigations mean that it would be no surprise to see even more money ploughed into these investigations to increase HMRC’s coffers further.
The team looking into individuals and SMEs investigate a broad number of taxes, including VAT, Income Tax, and National Insurance contributions.
The Treasury has already pledged an extra £1.8 billion to HMRC in the lead up to 2020 to collect even more additional tax and increase the number of tax investigations. In return for this additional amount from Government, HMRC has committed to collecting nearly £1 billion of additional tax revenue annually by 2020-21.
HMRC has been known to see individuals and small businesses as a soft target, as they often do not have the same resources as large businesses, and cannot negotiate with tax inspectors in order to close down or limit tax investigations.
With HMRC looking to increase its yield, both individuals and businesses need to be more careful than ever about their tax practices and review their current arrangements. We can provide guidance in order to ensure proper records are maintained, etc.
We are happy to provide assistance and advice during tax enquiries to ensure clients receive the right level of support from our experienced tax team and our tax fees insurance scheme, provided through Professional Fee Protection Limited, also protects clients from the professional fees involved in an enquiry.