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HMRC crackdown on small business tax errors proves costly for entrepreneurs

Independent businesses are at risk of being hit by VAT fines as HMRC crack down on small business tax avoidance.

Research from UHY Hacker Young found that HMRC increased investigations into small and medium business tax avoidance during the 2016/2017 tax year. As a result, they collected an extra £474 million in corporate tax, a five per cent year on year increase.

It is suggested that independent businesses are more likely to be investigated than larger companies due to the increased possibility of errors.

Independent business owners often don’t have the accountancy resources that larger companies take for granted. Often, entrepreneurs choose to submit their own tax returns in order to reduce business costs.

Lack of experience and a complicated submission process can lead to independent business owners making costly errors on their tax return. These errors can be considered as a form of small business tax avoidance by HMRC, resulting in large fines.

Tax returns can be a financial minefield for independent businesses, as higher than expected VAT bills can seriously damage a company’s cashflow.

Luckily for those affected, a flexible finance solution is available. A cash advance is a quick and simple way for businesses that accept card payments to raise necessary funds.

Andrew Johnson used a cash advance from Quick Capital when his pub received an unexpectedly high small business tax bill:

“During a quiet time of the year, I received an unexpectedly high VAT bill. As it came out of the blue, I didn’t have the funds available to pay.

I decided that a cash advance would be perfect for my company, as I needed quick business cash to avoid receiving a fine.”

The application process is quick and can be completed over the phone, and your funds can be secured in as little as 72 hours. The repayments are linked to your credit and debit card turnover, so you only pay back when your customers pay you!

If you’ve been hit with small business tax fines, talk to one of our friendly advisors today to see how a cash advance could help.


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