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HMRC nets ‘additional £3.9bn in VAT’ from small businesses

The amount of VAT revenue collected from small businesses as a result of HMRC compliance investigations has increased significantly over the course of the last year, according to a recent report.

HMRC collected £3.9bn of additional VAT revenue following compliance investigations into small businesses in the year to 31 March 2014, representing a 10% increase in receipts on the previous year and a near doubling of the £2.2bn raised in 2010/11.

The number of VAT investigations has risen significantly in recent years, with HMRC taking an increasingly aggressive stance and challenging a wide range of SMEs over their VAT arrangements.

However, some experts have warned that many small businesses are unable to bear the cost of challenging a decision by HMRC and in some cases, sudden demands for additional VAT payments may threaten the viability of a business.

We can help with your tax planning needs – please contact us for assistance.