Taxman Hunting Small Businesses
TAXMAN HUNTING SMALL BUSINESSES – The Revenue Services has announced that it is stepping up its efforts in order to hunt down, name and shame those small businesses that either fail to pay their taxes or avoid paying as much as possible.
When we talk about small businesses, these are often the one-man-band operations and it is interesting to know that while the Revenue Service is doing its job, as we should all pay our fair share of taxes, it is the small businesses that actually generate the vast proportion of tax for the UK government.
Small businesses out-number the large corporations by a huge mile and while the large corporations are able to dodge tax, through a series of legal loopholes, the taxman is fully aware that the small business does not have access to the kind of accountants and legal advisers that the corporations do. This makes the small business and easy target for the taxman.
The Revenue Service has now decided to compile a list of those small businesses that dodge their taxes in order to publicly name and shame them, and many tax groups feel this is just ploy to divert the public’s attention away from the Revenue Services failures in their ability to extract tax from the large corporations.
There is not hiding the fact that the likes of Google and Starbucks have been heavily criticized in the news for tax avoidance, but this is business and it is the responsibility of management to reduce their company’s tax liability in order to benefit their shareholders.
Read: Tax Avoidance in the UK
On the other side of tax avoidance is the simple fact that companies are able to use the cash savings for further development of the company and many would agree that the cash is far better used internally rather than handing over vast sums of money to an institution as wasteful as the Government.
“The Name and Shame list was ‘plain, straightforward hypocrisy’ which was simply ‘identifying plumbers and hairdressers when it should be naming global corporations. The people named are easy targets. There are clearly different categories of tax crime, with small businesses who put cash in HMRC’s pockets named and shamed; but banks, wealthy lawyers and global corporations offered anonymity.” Richard Murphy, of Tax Research
When you look at companies like Starbucks who generated a turnover exceeding £400million and has managed to get away without paying any tax on its profits, is it little wonder that the public are calling this a ‘Witch Hunt’ on small business, simply because they are an easy target.
One thing is certain… Like any Government body the Revenue Services runs an old and antiquated service that fails continuously to provide the service it was design for. The Governments tax legislation is full of holes that the large corporations can take full advantage of while the small business, who are the very backbone of commerce, are always in the firing line and the taxman has not compunctions about letting the hounds lose to hunt them down.
This just goes to show you the state the UK Tax Service and how ineffective Government has become.