Chancellor boosts HMRC funding to tackle tax non-compliance: What does this mean for businesses?

The Chancellor of the Exchequer, Rachel Reeves, announced that “necessary and urgent” work must be done to plug the 22 billion-pound hole in public finances.

She explained that tackling tax non-compliance (tax avoidance and fraud) would be a vital tool in their belt. 

What new powers and funding has the Chancellor announced for HMRC?

The Chancellor revealed that extra funding will be given to HMRC to hire more compliance officers and invest in their technology infrastructure. This will be done to crack down on tax non-compliance to raise much needed revenue. 

Although no specific figures were given in the announcement, during the election Labour promised it would invest £555 million a year into HMRC. It also mentioned it would aim to boost the number of tax compliance officers by up to 5,000!

When will more be announced about HMRC’s powers?

It’s expected that we will hear more in the Autumn Budget, due to be held on 30th October.  

Although the Labour Party had promised no increases to income tax, national insurance or, VAT during the election, the Chancellor mentioned she would need to make some “difficult decisions”. So, it’s unclear what changes might be in store. 

What are the implications for businesses?

For small businesses and contractors, Seb Maley, CEO of tax compliance firm Qdos expressed his concerns that  “innocent freelancers and contractors might get caught up in long, drawn out and costly tax investigations.”

As the government tightens its grip on tax evasions, it’s more crucial than ever to ensure any financial practices are above board and fully compliant with HMRC regulations. 

How Crunch can help businesses stay tax compliant

As HMRC ramps up its efforts to crack down on non-compliance, the importance of meticulous financial management cannot be overstated. For freelancers right up to large enterprises, partnering with a reliable accounting firm like Crunch can provide peace of mind and assurance that they are meeting all regulatory requirements. 

Not only do you have access to easy-to-use accounting software designed to make managing finances a breeze, but you also have real in-house accounting experts. 

Want a free no-obligation consultation to see how Crunch can help? Enquire now

‍