SMEs under close scrutiny over taxes
HMRC earned an additional £470m from investigations carried out into the tax affairs of small businesses last year, as it comes under increased pressure to boost income from tax investigations.
UHY Hacker Young warns that SMEs could come under even greater scrutiny as the Revenue looks to raise tax take further still by shifting its focus from investigations into larger businesses – to smaller businesses.
UHY Hacker Young says that SMEs can be a soft target for HMRC because budgetary constraints mean small businesses do not tend to have tax specialists in-house, making it harder for them to challenge tax bills presented to them by HMRC that they see as unfair or inaccurate.
UHY Hacker Young tax partner Roy Maugham says: “Small businesses have already felt the effects of the taxman’s tougher approach to compliance, and the target to bring in billions more may lead to HRMC squeezing every pound it can from SMEs.”
“As well as being more likely for SMEs to make a mistake when it comes to their taxes, they are also less likely to effectively negotiate if they disagree with HMRC’s demands as they will feel out of their depth and fear arguing with the taxman will lead to substantial costs and protracted disruption.”
SME food producers borrowing more
The total amount borrowed by SME food producers hit a record high last year at £1.72 billion, as more face late payment by supermarkets and the need to invest in new equipment to stay competitive.
Finance provider LDF explains that the £1.72 billion borrowed in 2015 is up by 30% on the £1.32 billion borrowed five years ago in 2010, and up 70% on the £1.01 billion borrowed in 2006 (see graph below)
LDF says that increased pressure on supermarkets over the last few years, following the growth of discount chains and escalating price wars, means that many are putting pressure on producers to lower prices, or imposing lengthened payment terms. Many SME producers have found themselves needing to borrow more to cover costs and fund plans for growth as a result.
Fund to boost apprenticeships
A new multi-million pound fund to increase the number of degree apprenticeships available to young people has been launched by the Business Secretary Sajid Javid.
The new funding will help even more people get a degree while earning in one of the country’s top businesses. £8 million will be focused on supporting universities to design and deliver new degree apprenticeships while a further £2 million will be devoted to encouraging more learners to choose degree apprenticeships. The fund will run for the next 2 years and the process for universities bidding for the funds will be announced in April 2016.
Business Secretary Sajid Javid said: “We launched degree apprenticeships to unlock life changing opportunities for young people and give businesses the skills they need.
“This multi-million pound fund will go further in helping universities and employers design new top quality degree apprenticeships and open doors to our young people.”