News : UK taxman to clamp down on inappropriate tax reduction schemes
It has been revealed that a number of large enterprises operating in the UK are using inappropriate schemes to reduce the amount of tax they pay. Companies commonly use artificial intercompany transactions to avoid hefty income tax, with HM Revenue & Customs (HMRC) saying that they will be tackling this problem in earnest. For limited company contractors also wanting to avoid close scrutiny by the taxman, ensuring that all business accounts are fine tuned will be increasingly essential in order to avoid fines and fees.
It was revealed that HMRC had £1bn of “tax under consideration” on July 31st, 2012, a rise of £680m from March 2011. Lawyer and tax expert Heather Self said that the figures indicated an increasingly tougher approach by HMRC to get the income that is rightfully theirs, meaning that it is essential for all businesses, including limited company contractors, to get their financial figures accurate and up to date.
Whilst Ms Self suggested that there was greater interest by HMRC than ever before, a spokesman from the authority said that they hadn’t changed their approach to tackling the issue. However, the “tax under consideration” sum, a sum that is estimated by HMRC to be owed by those in Britain’s largest 800 companies, has grown considerably over the past year, indicating that more money is owed than ever before. With HMRC getting tougher on unscrupulous tax schemes, many businesses will need to ensure that they keep a careful control on their finances to avoid unnecessary scrutiny.