ClearSky explains why small businesses should be wary of HMRC caseload

A backlog of HMRC tax investigations means that companies could wait years for vital tax rebates. ClearSky Business investigates.


Warrington – WEBWIRE – Monday, January 06, 2014

HM Revenue & Customs currently has more than 25,000 tax disputes to investigate. It is estimated that the caseload could take more than 40 years to shift.

The backlog of tax dispute cases with HMRC could cost small businesses dear. That is the warning from accountancy specialists ClearSky Business, who explain that SMEs could wait decades for crucial tax rebates. But help may be at hand.

In an article on the company’s official blog, Daniel Mepham of ClearSky Business explained the significance of HMRC’s spiralling caseload to small businesses throughout the UK.

HM Revenue & Customs currently has more than 25,000 tax disputes to investigate. It is estimated that the caseload could take more than 40 years to shift.

The problem is that businesses that argue their case with the authorities still have to pay VAT upfront. If they are successful, they receive a cash refund. But with the potential to wait many years for that refund, the delay could be problematic for a small business; or even ruinous.

Fortunately, Mepham goes on to explain that help may be on the way in the form of the Alternative Dispute Resolution (ADR) facility which launched in September of this year, after successful trials.

ADR involves the contribution of a neutral, third party ‘facilitator’ whose role is to ensure that both parties in a dispute reach a mutually satisfactory outcome.

While some have welcomed the introduction of ADR as an attractive alternative for businesses in long running HMRC disputes, others have criticised the move as too little too late. Only time will tell if ADR proves to be the solution to HMRC’s backlog.

Mepham said: "The sheer scale of the backlog being faced by HMRC means radical action is required, and the jury is out as to whether ADR represents that ‘game changer’ the taxman so desperately needs.

“Regardless of the new alternative dispute resolution (ADR) process, for small businesses prevention is still much better than cure when it comes to tax disputes.”

Click here to read more about this potentially make or break issue for SMEs.

For more accountancy advice for small businesses call ClearSky Business on 0800 014 9596 or pay a visit to http://www.clearskybusiness.co.uk.


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Jennifer Whittaker
PR & Social Media Executive
ClearSky Business
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