Worcester Tax Specialist issues warning over HMRC ‘dash for cash’

Will Silsby, Director at Rabjohns LLP, has today warned that local businesses should brace themselves for a deluge of activity by HMRC as Tax Inspectors are tasked with reducing the tax gap by £4bn in the current tax year.

It is expected that the latest initiative by HMRC, dubbed the 'dash for cash' will see a switch from lengthy and wide-ranging enquiries cases to more quickly negotiated and more narrowly focused settlements. HMRC hope that this approach will more quickly generate revenue and help swell Government coffers.

The objective may not be as dramatic as it sounds. £4bn represents only 10% of HMRC's own estimate of the tax gap of £40bn - a figure which many commentators consider to be unrealistically low. However, for those targeted in the 'dash', that will be academic.

Silsby comments," The concept of collecting the right tax from everyone at the right time is one thing. What is much more worrying is the risk that the 'dash for cash' will see HMRC officers under pressure to cut corners with the result that taxpayers who are not properly represented could end up paying too much tax. We can also expect to see a virtually complete U-turn from the philosophy of the Business Payments Support Scheme - the tax deferral facility which has so far helped many Midlands businesses survive the impact of the recession."      

"But it is not all bad news", Silsby added. "If the 'dash for cash' is a genuine attempt to avoid tax disputes dragging on at enormous cost both to taxpayers and the public purse, that has to be good news. HMRC enquiries can be enormously disruptive to businesses and many owners might be prepared to sacrifice debates on fine points of detail (however fascinating those might be to tax-anoraks) if it meant they could just sign a cheque and get on with running their businesses."  

For more information please contact Will on 01905 732100 or e-mail him at ws@rabjohns.co.uk.

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