HM Revenue & Customs increased recoveries from tax investigations involving individuals and small businesses. Around 255,000 investigations were closed last year, generating £6.3 billion in additional compliance revenue. The average yield per investigation rose 23%, reaching £24,700 from £20,100. The higher take is linked to stricter enforcement and increasingly complex tax rules. HMRC has stepped up scrutiny of smaller businesses and self-employed taxpayers, while advisers warn many struggle with frequent legislative changes. Confusion is cited in areas such as buy-to-let taxation, including mortgage interest relief. Small businesses face greater administrative pressure, with complex returns and forms contributing to mistakes and higher compliance costs, including average annual tax admin spending of £4,500.
"HM Revenue & Customs has sharply increased the amount it recovers from tax investigations into individuals and small businesses, amid growing concerns over the complexity of the UK tax system and rising compliance burdens."
"The tax authority closed around 255,000 investigations into small businesses and individuals last year, recovering a total of £6.3 billion in additional compliance revenue, according to analysis from accountancy group UHY Hacker Young. The average yield per investigation rose by 23 per cent over the year, increasing to £24,700 from £20,100 previously, highlighting what advisers describe as a combination of stricter enforcement and increasingly complex tax rules."
"“Significant changes to the way buy-to-let investments are taxed, for example, mortgage interest relief, have led to confusion amongst amateur property investors,” he said. He added that small businesses in particular were facing mounting administrative pressure as tax requirements became more detailed and time-consuming."
"“Many small businesses don't have the capacity to deal with the level of detail and box-ticking required to submit complex tax returns, so it is no surprise they are making more mistakes,” he said. The Corporation Tax 600 form, used by small companies to report liabilities to HMRC, contains more than 200 separate fields that may need to be completed, along with a further 12 supplementary forms depending on the nature of the business."
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]