The Federation of Small Businesses has attacked the Government for failing to cut red tape for small firms.
The Government has a stated objective of cutting bureaucracy for small businesses but FSB chairman John Walker says HMRC’s plans to inspect tax returns of up to 20,000 small firms undermines that pledge.
He says: “There is a huge difference between the rhetoric of the Government about helping small businesses and what they are doing in reality.”
HMRC says it is reviewing the policy and will publish its findings before April.
Walkers’ comments come after HMRC was criticised for striking a deal with investment bank Goldman Sachs, allowing it to pay £10m less tax than was owed.
Conservative MP for Witham Priti Patel says: “The attitude of HMRC to small businesses is frankly disgraceful when they are blatantly doing deals with large firms which have allowed them to escape millions of pounds in tax liabilities.”