HMRC warns small businesses and their accountants to make sure they comply with the new strict tax checks introduced by HM Revenue as an enforcement to cut tax avoidance and evasion.
The Revenue is to spend £1 billion, 25% of it's budget on a new framework that has it's target to pursue those who bent or broke the rules. The measure comes as last year the Revenue promised to take more people to court to recover tax instead of cutting deals in out-of-court settlements. With companies and individuals prepared to defend themselves in court, such a strategy has proved expensive. It appears that this is an area that needs investing in since the Revenue is under constant pressure to increase its overall tax take.
Taxpayers can expect far more frequent enforcement actions, inquiries and challenges to their tax affairs and far greater scrutiny of their affairs, even where they have structured their finances within the letter of the law.
Lesley Strathie, who took over as the HMRC's chief executive and permanent secretary five months ago, said: “Our challenge is to meet increased demand on our services while the resources available to us substantially reduce by 2011. In effect, we need to do much more with less as we respond to the current economic climate and the needs of our customers. In the current difficult economic climate, it is more important than ever that HMRC helps and supports customers fulfil these obligations while relentlessly pursuing those who bend or break the rules.”
More importantly for accountants, the government's taxation department is now within rights to check a taxpayer's premises and assets as well as inspect statutory business records with no right of appeal. For all visits, they are however required to give at most a week's notice unless they believe a surprise inspection is deemed necessary.
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