Businesses warned to keep HMRC in the loop following steep fine

Small businesses are being warned to keep HMRC informed about any changes to their business, after one firm was reportedly fined £10,000 for not informing HMRC that its business name had changed.The Forum of Private Businesses notes that the company in question, which wants to remain anonymous, had a previously exemplary record with HMRC.The firm was originally fined £30,000 under VAT notification liabilities contained in the Finance Act 1985 and later the VAT Act 1994. This was after it added Ltd to its business name, following switching from a partnership to a limited company without informing HMRC.With intervention from an accountant, the business has had its fine reduced to £10,000 and work is ongoing to get the fine down further.Andrew Needham, tax adviser to the Forum of Private Businesses, said, “I am concerned that this is a change in HMRC's long-standing policy of waiving its technical ability to impose this penalty fine in such circumstances. If this is carried through and sets a precedent it could result in huge fines being imposed on small businesses which, in reality, have done very little wrong.”He added, "It is important that all small businesses are aware they could face steep fines unless HMRC is kept fully updated – but this heavy-handed approach is the very opposite of the support that is desperately needed at this difficult time and HMRC risks further alienating firms hit by its disproportionate, targeted business records checks regime and widely-reported poor levels of service."

http://www.50percenttax.co.uk/index/2012/8/20/businesses-warned-to-keep-hmrc-in-the-loop-following-steep-f.html