A £158BN hole in the public finances means that HMRC are being used to try and raise extra cash for the Treasury, as quickly as possible and that will mean easy targets, so small and medium size firms, anyone in the construction industry are in the direct firing line for:

employer compliance reviews

PAYE/NIC investigations

Employment status reviews

tax investigations

you name it and they are heading your way and don’t think it won’t happen to you – it will, so why not take advantage of the special deal that EICG is running this month on PAYE/NIC healthchecks and Construction Industry reviews, call us today on 0800 917 9176 to see how we can help you avoid being a victim

HMRC are now out and about big style as they have told their Inspectors to bring in as much money as possible, as quickly as possible, which is not really surprising given the current economic environment.  There will be pressure to settle long running full enquiry cases and Inspectors will be encouraged to take up aspect cases (these are as they sound, looking at a particular aspect of a business, eg employment status, entertaining expenditure etc ) which are likely to be settled more quickly to optimise the tax yield in the current fiscal year.

Interestingly, it would appear that the new “Cross Tax” enquiry framework, involving PAYE/NIC, Corporation Tax, VAT etc is being shelved as it is slowing up the enquiry process so Inspectors will be reverting to just working their particular area

HMRC are planning a massive increase in the take from: tax investigations, employer compliance review, tax enquiries, employment status reviews and CIS reviews, so you have been warned

HMRC plans to seize an extra £4bn in 2010/11 through more aggressive tax investigation work and tougher powers. To achieve such a high yield, HMRC will need to widen the scope of its enquiry work to include marginal cases. This increases the risk innocent businesses are caught up in a massive fishing exercise

Tax investigations can be hugely costly to taxpayers in respect of management time, stress and advisory fees, while much of the tax HMRC claws in through investigations is not tax that has been deliberately evaded, in many cases it is the result of HMRC reinterpreting tax law and this brings in the well known scenario of my pockets are deeper than yours – otherwise known as if an individual or business can’t afford to challenge HMRC’s decision through the tribunals and court system, then HMRC wins.

So you have been warned, take specialist advice before it happens to you

The way HMRC carry out the following, are going to change beyond recognition:

• Employer compliance reviews
• Tax investigations
• Tax enquiries
• PAYE/NIC investigations
• PAYE investigations

and if you’re not up to speed it’s going to be a real shock to the system. If you’re advisor is unaware then be really concerned and give EICG a call on 0800 917 9176 to see how we can help you: before and during a visit.

HMRC Cross tax reviews is just one example of this, so moving away from potentially three visits in a year to a visit combining PAYE/NIC, VAT and Corporation tax. For very large businesses this has been trialling with a team of HMRC officials visiting (oh what joy) and is based on extensive reviews of other tax systems across the world. However, this is likely to be cascaded downwards to other sizes of business with the use of a newly retrained general tax practitioner – as you can imagine this has pro’s and cons as anyone who deals with a specialist area of tax knows it is just that, specialist and not generalist, so my advice is don’t let someone “have a go” on your behalf use specialists, as we have at EICG to cover these areas.

Keep on reading for further updates on what is an ever changing Inland Revenue approach to solving the national debt!