HM Revenue & Customs (HMRC) has published three important new documents regarding its flagship Making Tax Digital (MTD) project to help clear up confusion among businesses. Continue reading New Making Tax Digital updates published by HMRC
Nearly half of business owners in the UK believe that poor cash flow is stopping their business from reaching its full potential, according to a new study. Continue reading Cash flow concerns are keeping business owners awake at night
New research carried out by the British Chambers of Commerce (BCC) in collaboration with Wesleyan Bank suggests that small and medium-sized enterprises (SMEs) are shying away from finance and failing to explore expansion opportunities. Continue reading SMEs shying away from finance
In recent days, new official estimates of monthly Gross Domestic Product (GDP) growth have been published by the Office for National Statistics (ONS), indicating that the UK economy is beginning to warm up this summer after a slow winter period. Continue reading Official estimates suggest strong UK economic growth
Small and medium-sized enterprises (SMEs) are being warned to ensure that they are fully compliant with their auto-enrolment obligations, after it emerged that regulators are increasingly cracking down on businesses that fall foul of the rules. Continue reading Regulators increasingly cracking down on auto-enrolment failings
The Government has today ‘named and shamed’ a further 239 employers found to have paid workers less than the National Minimum Wage. Continue reading Government ‘names and shames’ employers found to have underpaid workers
Small and medium-sized enterprises (SMEs) are being urged to improve their cyber security following a string of recent hacks affecting large companies such as Ticketmaster and Dixons Carphone in recent weeks. Continue reading SMEs reminded to keep on top of cyber security
Growth in the UK’s service sector hit an eight-month high in June, indicating that the UK economy is beginning to ‘pick up speed’. Continue reading Strong growth for service sector boosts UK economy
Figures released by HM Revenue & Customs (HMRC) show that the UK’s tax gap – the difference between tax owed and actual receipts – is continuing to fall.
The Revenue has revealed that the tax gap for the 2016-17 tax year was 5.7 per cent, down from six per cent in the previous year and 7.3 per cent in 2005-06. It says that, had the tax gap not fallen, a total of £71 billion less tax would have been collected last year.
The figures show that of the total tax that was unpaid, the largest proportion was from small businesses, with £13.7 billion not paid.
According to HMRC, taxpayer error was nearly twice as likely as criminality to be the culprit for missing tax, with errors costing the Revenue £9.2 billion in lost income, while criminality cost £5.4 billion.
Meanwhile, Income Tax, National Insurance and Capital Gains Tax had the biggest tax gap at £7.9 billion. The VAT gap, on the other hand, has fallen from 12.5 per cent in 2015-06 to 8.9 per cent in 2016-17.
Mel Stride, Financial Secretary to the Treasury, said: “These really positive figures show that the tax gap is the lowest in the last five years, which reflects the hard work that HMRC and I have been doing to ensure we support businesses to pay the right tax at the right time and clamp down on tax evasion and avoidance.
“Collecting taxes is essential for funding our vital public services such as the NHS – indeed, had the tax gap remained at its 2005/06 level the UK would have lost £71 billion in revenue destined for public services, enough to build 200 hospitals.”
Jon Thompson, Chief Executive of HMRC, added: “The UK is the only country in the world to regularly publish their tax gap in detail and at 5.7 per cent, it remains at its lowest for five years. I am pleased that the downward trend shows HMRC and HM Treasury’s continued hard work to tackle evasion and avoidance is working.
“HMRC is also working hard to help taxpayers get their tax right by offering support and investing in digital services to improve businesses’ record keeping and reduce errors.”
The Revenue is now touting the forthcoming launch of its flagship Making Tax Digital programme as the latest weapon in its arsenal as it looks to reduce the tax gap further.
A survey has revealed strong support from the UK’s small business community for measures to simplify business rates.
A total of 71 per cent of the small businesses questioned said business rates should be simpler and have a greater degree of flexibility.
Meanwhile, 49 per cent of SMEs said the Government is doing too little to assist with business rate relief, with just 36 per cent satisfied with its efforts.
Of those questioned for the research, carried out by Close Brothers Asset Finance, 56 per cent had seen their bills increase in the last two years.
“The message from SMEs is clear that more needs to be done,” said Neil Davies, CEO of Close Brothers Asset Finance.
“Our study has found that it’s a nuanced picture out there and what I mean by that is that the call for clarity is not driven by cost concerns.”
Chancellor Philip Hammond has previously made concessions following concerns from SMEs. This includes bringing forward the next business rates revaluation from 2022 to 2021.