Tax investigations continue to rise - What's next?
- 26th June 2024
At the end of 2023 Sky News reported that HMRC had opened 23% more inquiries into unpaid VAT, upping the number of investigations to 109,400 in the last financial year. The report also stated that increased tax compliance measures netted HMRC £11.4bn in unpaid tax.
It’s not just the wealthy and large businesses who are being targeted however. Cases into individuals and small businesses were up 22%.
These are some eye watering increases. Vicky Prior Partner and Tax Specialist at Forrester Boyd Chartered Accountants stated, “we knew HMRC were going to up their game, particularly as the last financial year included all the measures that were put into place during the pandemic. If there were going to be mistakes in tax and income reporting, that year was going to be it, and they were indeed prepared.”
Vicky continued stating, “as we await our political fate, one thing we do know for sure, is that whichever party gets in, their manifesto’s include more money for HMRC to up its tax investigations even further.”
As the political parties push to improve spending in critical areas whilst trying not to increase the personal burden, when you consider in the last year HMRC managed to claw back £11.4bn from tax investigations, you can see why this is a particularly good income stream for any Government to invest in.
Recent news articles in the Tax Journal and IFS Magazine have reported that the major political parties have stated they will invest in HMRC to give them more resources to chase unpaid tax.
So, whatever fate awaits us on 4th July 2024, one thing is for certain, HMRC will be increasing their drive to investigate businesses and individuals who they suspect have underpaid tax.
Vicky said, “For any business or self-employed person, I would strongly recommend ensuring that you have tax investigation protection. There are many schemes out there that will protect a business should they be investigated. You should not underestimate the amount of professional hours that you would need and the disruption to a business should an investigation ensue. We offer all of our clients the opportunity to take out cover, to lessen the impact should the worst happen.”
SOURCES:
https://www.taxjournal.com/articles/where-will-hmrc-focus-next-
https://news.sky.com/story/increased-hmrc-vat-investigations-bring-in-11-4bn-of-unpaid-tax-13038178
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
