HM Revenue & Customs (HMRC) has revealed that it is closely watching small firms by monitoring the credit card payments recorded by companies including newsagents, restaurants and garages to see if they match up with the profits that they declare on their tax returns. The £100 million crackdown is “concerning”, says Chas Roy-Chowdhury of the ACCA, calling it a “Big Brother approach”.
According to HMRC, around 30 per cent of sales made at most small businesses are paid for in cash, and many companies may not be declaring all of these payments on their returns. If HMRC finds that a firm has recorded 90 per cent of its transactions as card payments, this may raise a red flag and trigger further investigations.
“HMRC has made it clear it is not 100 per cent sure how good its data is. The taxman needs to be sure business owners don’t end up being wrongly vilified,” says Chas Roy-Chowdhury.
Are you concerned about a tax enquiry into your affairs? Could you have possibly under-declared? Or, worse still, are you already under enquiry?
Our tax specialists, some of whom are former HMRC Inspector of Taxes, are well versed in dealing with all types of tax issues. We are also readily available to oversee HMRC disputes on your behalf, as well as to represent clients in appeal proceedings before the Tax Tribunal. In some situations we can also offer professional fee protection insurance, so the costs are covered in whole or in part. If you have any concerns relating to your tax affairs, please contact your usual Beavis Morgan Partner.