The Federation of Small Businesses (FSB) criticised the coalition’s decision to press ahead with moves to inspect up to 20,000 firms from April to ensure their paperwork tallies with their tax returns.
“Despite the worsening economy, HMRC is launching this scheme regardless of the consequences,” John Walker, FSB chairman, told the Independent.
The business records check (BRC) scheme will see firms unable to meet HMRC’s requests for information fined up to £3,000.
Meanwhile, Tory MP Priti Patel said it was “disgraceful” HMRC was harassing small firms while “blatantly doing deals” with major companies which allowed them to avoid paying millions in tax.
“It seems as though HMRC sees small businesses as low-lying fruit to meet their targets. That kind of persecution is outrageous.”
