A surge in tax investigations by HMRC reveals a more assertive approach to tax collection across the UK. How are small businesses and freelancers affected? ...
The results of this more aggressive approach have been significant. Last year, HMRC successfully generated a whopping £814bn in tax revenue, marking an 11.3% rise compared to the preceding year.
Its primary objective has always been to ensure taxpayers meet their obligations. Yet, the notable surge in investigations suggests a more strategic effort to bridge any existing tax gaps. One might speculate that these efforts are being driven by a need to boost the economy, perhaps in response to recent economic challenges.
It's no secret that when it comes to tax investigations, larger corporations have the resources and legal firepower to navigate any potential disputes or inquiries. However, the same cannot be said for small businesses and freelancers. These groups often operate with tighter margins and fewer resources, and I've noticed it's the self-employed sector that's witnessing a noticeable uptick in investigations.
HMRC is clearly on a mission to increase tax receipts, and we're seeing first-hand experience of this. The number of self-employed workers being investigated by the tax office is noticeably on the rise. Given these circumstances, it's crucial for small businesses and freelancers to be more vigilant than ever. Any errors or oversight in tax filings can lead to investigations, which can be time-consuming and financially draining.
Here are my top tips:
- Stay Organised: Ensure you maintain all relevant documents, receipts, and financial statements. Investing in a good accounting system or software can make this process easier
- Seek Professional Advice: Engage with a tax professional or accountant who can guide you through the complex tax landscape
- Stay Updated: Tax regulations can change. Ensure you're aware of any new changes or regulations that might affect your tax obligations
- Pay Bills Promptly: One of the simplest ways to avoid unwanted attention is by ensuring that all your tax bills are paid on time
HMRC's intensified compliance activities serve as a reminder of the importance of diligent tax practices. While the increased scrutiny might be daunting, especially for small businesses and freelancers, staying informed and prepared can alleviate potential concerns.
By ensuring all tax obligations are met timely and accurately, businesses can focus on growth and success.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.