HM Revenue and Customs (HMRC) is being slammed for “suffocating” entrepreneurs with its “scattergun” approach to tax investigations.
Speaking exclusively to the Daily Express, small businesses are criticising the Government body for perceived malpractice which is supposedly losing firms’ income and causing people stress.
These include implementing damaging consecutive tax rises, removing crucial support for entrepreneurs and unnecessarily excessive probes.
Specifically, HMRC’s decision to close its self-assessment helpline has angered freelancers and SMEs who needed help with sending their quarterly tax returns by July 31.
Insiders have previously shared that the move to a digital tax system and the impact of COVID-19 have exacerbated the institution’s internal issues.
Earlier this year, a report by the Committee of Public Accounts revealed that customer post and call handling had dropped substantially over the pandemic.
For example, HMRC only responded to 39.5 percent of mail within 15 days in 2021-22 compared to 70.3 percent during the 2019-20 tax year.
Furthermore, the average speed of answering taxpayer calls jumped from 6:39 minutes in 2019-20 to 12:22 minutes in 2021-22.
One business owner shared with This is Money that they lost a third of their income after being left waiting to receive a VAT number from HMRC.
Seb Maley, the CEO of tax insurance provider Qdos, spoke exclusively to the Daily Express about why HMRC’s “approach to policing” is doing more harm than good.
He explained: “The UK’s tax burden is suffocating some of the UK’s smallest enterprises – whether that’s freelancers and contractors or small business owners
“And if tax hike after tax hike wasn’t enough to contend with in recent years, HMRC’s approach to policing and subsequently enforcing tax compliance leaves a lot to be desired.”
The tax expert warned that small businesses are “losing confidence” in HMRC and urgent change is needed to regain a “responsive, well-sourced” tax body.
Mr Maley added: “A scattergun approach to tax investigations means thousands of business owners are wrongly investigated, simply adding to their emotional and financial stress.
“Throw in the fact that HMRC decided to close its self-assessment tax helpline until September and it’s no surprise that small business owners are losing confidence in the tax office.”
“The level of service is nowhere near acceptable. The ever-changing, complex world of tax means small businesses need a responsive, well-resourced tax authority. As it stands, they have the opposite.”
Daily Express has contacted HMRC for comment.
