HM Revenue & Customs plans to raise an extra £4bn this fiscal year from more aggressive tax investigation work and tougher powers.

The HMRC published business plan for 2010/11, reveals that HMRC is planning to raise £16.1bn of tax through compliance activity.

Commentators have said that to achieve such a high yield, HMRC will need to widen the scope of its enquiry work to include marginal cases, and says this increases the risk that innocent businesses are caught up in the net.

This is therefore a warning call to all small businesses because HMRC often regard them as easy prey. Most individuals or small businesses cannot afford to challenge HMRC’s decision through the tribunals and court system. Thus handing over victory to HMRC.