Companies concerned that their finances may be out of date or are at risk of being neglected need to ensure they are compliant and not defaulting on tax payments.
This is a fundamental of running a successful profit-focused company, of course, but the reminder now comes as HM Revenue & Customs (HMRC) ups its visits to premises associated with tax evasion as investigations jump by more than one in ten.
Increase in tax evasion prosecutions
According to data obtained by Pinsent Masons, HMRC carried out 500 raids on properties involved in ongoing tax evasion cases last year. According to the law firm, this is an increase of 12% on the 445 that were raided in 2013.
It is also more than triple the number of annual raids on properties that HMRC carried out between 2008 and 2012. The increase in raids is as a result of a more aggressive stance on tax swerving since the coalition came to power and highlights the importance of accurate bookkeeping.
As part of a tougher approach to tax dodgers, HMRC wants to prosecute 1,165 of them in the 2014-15 tax year. In 2010, the same target was set at just 250; a fifth of today’s figure.
Jason Collins, the head of tax at Pinsent Masons, said:
“HMRC is making a huge effort to up the ante against tax evasion, raiding more properties and arresting more suspects to keep up with its criminal prosecutions target.”
Throwing a wider net
Collins went on to say that HMRC investigators are also “casting their net wider”. He explained that they are no longer targeting only the biggest suspected tax dodgers, but are also going after lower value evaders.
With such an aggressive stance, small businesses created in the last few years, single traders and freelancers are all at particular risk of coming under close HMRC scrutiny. Many firms recognised the importance of keeping finances in order straight from the start of course, signing deals to outsource their accounts.
However, there are those that have not and could now be at risk of costly and time consuming work to get back on track in order to avoid prosecution.
Early morning raids
Company owners are also warned that business premises and assets are not exclusively targeted, with the HMRC able to go into private properties too.
The teams are also entitled to search and arrest individuals without police presence and seize documents and computers from their often early morning and weekend raids.