Would HMRC treat UK businesses in the same way Brussels is likely to treat the UK probably not, says accountants James Cowper Kreston

The UK Government is at the centre of heated discussions today (7 November) regarding the EU?s demand for £1.7bn, stating that this bill is 'unacceptable' and that it 'will not pay'.

But how would the UK Government respond if businesses took the same stance when facing demands from HMRC with regards tax payments?

Sandra Mundy, a partner specialising in business restructuring at accountants James Cowper Kreston said: “This bill from the EU, based on the economic performance of the UK economy, is not that dissimilar from Corporation Tax, which is of course based on the financial performance of businesses.

“If UK businesses were to respond to tax demands in the same way, HMRC would prove to be a far tougher negotiating partner.  It would charge interest and penalties on late payments, and under Cameron’s own proposals, HMRC may soon have the powers to raid bank accounts.”

“Our clients would not be given the same flexibility from HMRC that the UK Government might receive from Brussels,” says Sandra.

Part of the EU’s demands are based on estimates of the UK black economy over the past 19 years.  It attributed £5.3bn of revenues generated by prostitution and a further £4.4bn attributed to illegal drugs.

Sandra adds: “If the UK Government were able to find a way to tax the black economy it would have generated some £1.94bn in tax revenues over the period in question – more than enough to meet the £1.7bn being demanded from Brussels.”

James Cowper Kreston is a firm of accountants and business advisers with offices across the Thames Valley and the South Coast.  Its clients include entrepreneurial and fast growing owner-managed businesses. 

Sandra Mundy
Partner
+44 (0)2380 221222
smundy@jamescowper.co.uk