HMRC: Are they Britain’s biggest bank?
Opinion suggests that HMRC are acting like the lender of last resort rather than a tax collector. The bad debt provision as at 31 March 2009 stands at £11.2 billion – 40% of the total owed, we have yet to see figures for the current financial year. The figure owing could now be over £30 billion leading to the HMRC acting more like a lender than tax collector.
According to research from Syscap, the number of directors facing disqualification proceedings for non-payment of company tax has risen to more than 800 over the year to March 2010 from around 650 a year ago.
HMRC appears to be adopting a more aggressive strategy revealing plans to seize an extra £4 billion in revenue in 2010/2011. The effect of this leave blameless businesses facing unnecessary probes into their day to day business. The total figure to be clawed back under the new strategy is £16 billion a 33% increase on the previous year. Tax investigations can be hugely costly to taxpayers.
The effect of HMRC’s new inspection powers could be down to how they are interpreted by inspectors. Rumours suggest that inspectors demand private bank statements and records at the start of enquiries. This practice is meant to be used only in cases where business records are deemed “unreliable”.
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This article contains extracts from Credit Today publishing and MCR an insolvency practice.