What are the risks?
With an average enquiry taking 24 months to conclude, the associated costs can quickly escalate, yet the cost of not defending enquiries to their full extent could be substantially higher.
With HMRC forecasting an increase in compliance activity, coupled with the cost of living crisis and looming recession, it is more important than ever to ensure you're protected against unexpected costs that could add financial pressure to your business.
HMRC enquiries are better targeted and are being undertaken with an unprecented level of detail and persistence, with approved Coronavirus Job Retention Scheme and Self-Employment Income Support Scheme payments, in particular, under the microscope.
Even if you've done nothing wrong, you may still be selected for a detailed review of your tax affairs. It's therefore a huge financial risk to not be protected against the growing number of HMRC enquiries.
HMRC continue to narrow the tax gap
The UK tax gap is estimated to be 5.1%, continuing a long-term reduction in the overall tax gap, falling from 7.5% in 2005/6. This means HMRC secured nearly 95% of all taxes due against the backdrop of Covid-19.
In the 2020/21 financial year HMRC's revenue was £608.8 billion. This has increased again to £731.5 billion protected in the financial year 2021/22. This is higher than pre-pandemic levels across all taxes.
With HMRC's continued drive for compliance, make sure you are protected with our comprehensive tax investigations package.