Date posted: 17th Feb 2025
It is understood that HMRC are recruiting 5,000 more tax officials over the next five years to help reduce the “tax gap.”
The tax gap is the difference between the amount of money HMRC believe is owed compared to what is actually collected. The tax gap is estimated to be £40bn.
Given the plans to recruit more staff into HMRC, it could mean that SME businesses face increased scrutiny from HMRC via tax enquiries or reviews.
This could mean that HMRC simultaneously review the business’ PAYE, corporate tax and VAT affairs at the same time, to raise as much money as possible. This could lead to enquiries being opened into directors personal tax affairs.
If there are discrepancies found, then not only could further tax be raised but HMRC are also likely to seek higher penalties as well as late payment interest (which will soon rise to almost 9%).
More people, more tax enquiries, more revenue raised.
As you will be aware, we offer a leading tax protection service, which is offered to all clients via a subscription. By subscribing to the service, it would mean that our costs for dealing with the enquiry as paid via an insurance company rather than you. Sadly, the tax is not covered but at least the fees are protected if you subscribe to the policy. The fees will pale into insignificance compared to the cost of the policy. Enquiry fees can run into thousands of pounds.
Of course, like any similar policy such as key protection policies, income protection etc they are only valuable if they are used. But with HMRC increasing their staff numbers, can you afford not to subscribe?
If you have any queries, please give us a call.
