HMRC targeting SMEs

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During the 2016/17 tax year, an additional £474m in corporate tax was collected from SMEs in the UK. This data was collected by an accountancy group, UHY Hacker Young. The focus on targeting SMEs has meant that the HMRC have increased the amount of cash they received by 5% comparing to the previous tax year of 2015/16.

However, as there has been more targeting on SMEs, many believe this is an unfair targeting on self-employed and the HMRC should be focusing on the larger firms. A spokesperson for the UHY has said that small businesses have been put under the spotlight due to them being an easy target compared to many of the larger firms.

This singling out of the SMEs may be due to the fact that they are not bringing in enough tax, and therefore are going after easy companies to try and close the ‘tax-gap’.

Therefore, this being said, SMEs are being warned to make sure their accounts are up to date, and taking important steps to improve record keeping and research into new laws and regulations.


What is an SME?

SME stands for ‘small and medium sized enterprise’. In order to declare yourself as an SME to the government, you will have to ensure you fit in the guidelines. Below is the official benchmark set out by the EU.


Size                         Employee number 

Micro business             less than 10

Small business              Between 11 and 50

Medium business         Between 51 and 250

Large business              Between 251 and 1000

Enterprise                      More than 1000


Size                         Turnover in one year

Micro business              less than £1,400,000

Small business              Between £1,400,000 and £7,000,000

Medium business         Between £7,000,000 and £36,000,000

Large business              More than £36,000,000


As long as your business fits in these criteria’s, you will be able to declare yourself as an SME.

For more information, don’t hesitate to contact us.

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