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HMRC has commissioned and released research into it’s own investigations and the impact on small businesses.

Over half of those questioned said that they felt the HMRC investigations were too intensive and disruptive.

52% of the business stated that they were too intensive and 56% said that they did not believe that HMRC made enough effort to minimise the disruptions caused by the investigations, and did not appreciate the cost, time and effort required by the businesses for the inquiries.

Smaller businesses will not always have dedicated finance teams or in house accountants to address the inquiries so they are disproportionately effected by them.

You can see it from HMRC’s point of view, because it is the lack of dedicated finance teams and accountants that makes mistakes within their returns more likely, and they do net large amounts of extra unpaid tax from these investigation.

The ‘smaller’ investigations net an additional £16 for every £1 that they spend on the investigatory staff so you can see it is certainly worth their while.

Whilst most gave a positive impression of HMRC, it seems they have more work to do before they get small businesses to think that they are on their side.