But recent figures have shown that HMRC’s efforts have not been all that successful.
We hear stories daily about Small and Medium Enterprises (SME’s) and private individuals coming under attack by the taxman but are HMRC’s efforts wasted?
Statistics have shown that investigations into multinational companies are 18 times more fruitful than enquiries into SME’s and individuals.
In 2008/09, for every £1 it cost HMRC to run an investigation they clawed back £181. However, in enquiries into small businesses and individuals HMRC claimed back a mere £10 extra tax.
Perhaps this shows that HMRC should simply concentrate on large multinationals and avoid focusing on SME’s.
In the past 12 months, HMRC have raised a tremendous £4.9 billion through their investigation work into multinational companies in comparison to a measly £359 million from Self Assessment business and personal tax returns.
We are all aware of the huge deficit in Treasury funds but in order to try to reduce the shortfall it seems pointless for HMRC to concentrate their efforts on chasing individuals and small businesses.
Now, we are not saying we condone anyone avoiding their tax liabilities but surely it is common sense to focus on areas where HMRC know there is a larger amount of tax at risk?
Another point to bear in mind is that when a smaller company is under enquiry by HMRC, the more senior members of staff are tied up dealing with that and suffering from the incredible strain and more often than not they do not have the disposable funds to appoint sufficient representation.
This takes these vital members of an organisation out of the loop, something which can be fatal to a small business in these tough economic times.
The Government have repeatedly said that one of their main concerns is to help business during the ‘credit crunch’ but this seems to be impossible when HMRC are so aggressively chasing them.
We hope that HMRC will begin to show a little more sympathy towards SME’s. This is something, unfortunately, that we just cannot see happening.