With the pandemic causing utter economic disruption, it isn’t surprising that some things took a back seat with priorities emphasised at providing financial support to businesses across the UK.
Tax Tuesday returns this week to briefly highlight, and probably unsurprisingly so, the increase in tax investigation activity by HMRC.
It was announced back in March that a Taxpayer Protection Taskforce would be established to investigate both individuals and businesses who have fraudulently made claims against the numerous schemes set up by the government, in order to protect individuals and businesses against the financial impacts of Covid 19. Schemes such as the Coronavirus Job Retention Scheme (CJRS or Furlough Scheme), with an estimated 5%-10% of fraud against it, and the Self-Employment Income Support Scheme (SEISS), estimated 1%-2% of fraud, have been coming under increased scrutiny.
The above Taskforce investigations are in addition to any existing enquiries and according to HMRC data, tax compliance investigations generally, were also up 36% to 102,000 in quarter one of 2021 compared to the previous quarter. HMRC increased revenue by 29% to £14.2bn in quarter one this year compared with £11bn in the same quarter last year.
With the size of the tax bill left from the number of government support schemes available, we can’t see there being any ‘let up’ by the tax man any time soon. The focus will be on increasing HMRC revenue to compensate not just for any fraudulent claims but for potential genuine errors made with the extended and increased number of schemes offered during the height of the pandemic.
How can we help?
If you would like some help or tax advice, please don’t hesitate to get in touch with your relationship principal, call 0161 905 1616 or email intouch@haroldsharp.co.uk. Harold Sharp offer tax enquiry insurance for your business or personal tax needs.