But there are signs that it is being wound down – and that the taxman is getting tough on small businesses to claw back some of the £45 billion in annual unpaid taxes when it should be focusing on the worst culprits – large companies.
In addition to sending 40,000 letters to firms it suspects are trading above the VAT threshold yet are not registered and offering an ‘amnesty’ – meaning significantly reduced fines – until 30 September, HMRC is carrying out sector-by-sector investigations into tax avoidance and tax evasion.
Inevitably, small firms – which also face fines of up to £3,000 for mistakes on tax returns – are seen easy targets.
Many business owners will see this as hypocrisy. The Forum of Private business has submitted evidence to a recent treasury sub-committee set up to probe the taxman’s problems.
From calls continually going unanswered to poor and inefficient online systems, HMRC is not working properly and it shows.
According to Forum research small business owners spend £16.8 billion per year complying with red tape – including £5.1 billion on meeting tax regulations, which makes tax the biggest red tape headache of all.
A total of 84% respondents reported an increase in time spent on complying with red tape since 2009, with 64% spending more money on external tax consultants.
And now the Government has stopped producing statistics on firms benefitting from Time to Pay. It appears the scheme will soon be no more.
Yet big corporations are seemingly allowed to carry on as usual. During the boom years before 2008, many FTSE 100 companies paid negligible amounts of corporation tax, and even after the seismic economic events of recent years tax avoidance among the UK’s largest companies is rife.
There clearly needs to be a review of the UK’s complex tax system but, perhaps more urgently, the operation and function of nation’s tax body requires a major rethink.
