The Joys of Low Hanging Fruit - SME's Are Not Treated Equally

As per AccountingWeb, PAC pushed HMRC this week on its treatment of SME's.

"After Hartnett, Edward Troup appeared before the committee. In his opening statement, Troup heralded the HMRC’s success in lifting the veil on Swiss banking secrecy.

“In the early 2000’s banking secrecy seemed impregnable, the idea that this secrecy could be breached was unthinkable,” said Troup. “From 2018, we will get information from Swiss banks automatically, not just on command.”

“And what are you doing now?” asked Hodge, cutting Troup short. “It’s always the future; I’m interested in the now.”

“We have quintupled the number of prosecutions for tax evasion over the last five years,” said Troup.
“How many were small businesses?” asked Hodge. “What we’re interested in is equality of treatment, SMEs aren’t treated equally.”

In reply, Troup said that he wouldn’t go into operational detail and that it was “perception” that SMEs are treated differently from large enterprises.

This drew the ire of MP Richard Bacon. “It is not merely a perception – it’s a fact that the way small enterprises are treated is different,” he said. “For you to sit here and claim that it’s perception makes you look rather out of touch.”

Troup remained defiant, saying that HMRC has to "put some effort into enforcing compliance among SMEs, they represent £15.1 bn of our tax yield"."

In a nutshell, SME's are low hanging fruit that are easy targets. Hence HMRC uses them to hide its general ineptitude elsewhere.

Whilst it is all well and good to give Troup and HMRC a public dressing down, what will be the tangible outcomes wrt HMRC's treatment of SME's.

None I fear!

Tax does have to be taxing.

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