Small Business Tax Row

Business leaders and politicians are accusing HMRC of harassing small firms whilst taking a far softer approach to recouping tax from larger organisations including Goldman Sachs and Vodafone.

A plan to closely inspect as many as 20,000 companies to ensure that they can back up their tax returns with paperwork going back several years has also come under fire for apparently undermining government promises to reduce paperwork.

Companies who are unable to meet the requirements of these checks could face a £3000 fine. Speaking to the Independent, John Walker, Chairman of the Federation of Small Businesses said: “We have expressed our concerns to HMRC a number of times, but as far as they and ministers are concerned it is a policy aim to make this happen. There is a huge difference between the rhetoric of the Government in helping small businesses and what it is doing in reality”.

Priti Patel, the Tory MP for Witham said: “The attitude of HMRC to small businesses is frankly disgraceful when they are blatantly doing deals with large firms which have allowed them to escape millions of pounds in tax liabilities. It seems as though HMRC sees small businesses as low flying fruit to meet their quotas.  This kind of persecution is outrageous.

An HMRC spokesman replied to the allegations saying: “Following consultations with representative bodies, HMRC has begun a detailed review of the business records check project.”

“We recognise that the launch of this scheme has caused considerable concern to the tax profession and that more detailed consultation could have been carried out an earlier stage. In light of these concerns, HMRC will undertake a strategic review of the project in consultation with professional and representative bodies.” A final decision from HMRC is expected before the end of the financial year..

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