10 August 2012

Small firms urged to inform Revenue of any business changes

Small businesses are being urged to ensure that they keep HM Revenue & Customs (HMRC) updated on any changes to their business, no matter how small they may be.

The Forum of Private Business (FPB) has issued the warning, following the news that one firm has been issued with a £10,000 fine because it failed to inform inspectors of a change of name.

The firm was originally faced with a fine of more than £30,000 when it changed from a partnership to a limited company, thereby adding ‘ltd’ to its name, and failed to inform HMRC – despite having an ‘exemplary record’ for submitting tax returns and making payments on time.

The firm’s professional advisers are hoping to reduce the fine further, but experts are concerned that the penalty represents a change in HMRC’s long-standing policy of waiving the fine.

The Forum’s Tax Adviser, Andrew Needham, commented, ‘It is important that all small businesses are aware they could face steep fines unless HMRC is kept fully updated – but this heavy-handed approach is the very opposite of the support that is desperately needed at this difficult time’.

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