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A letter sent to David Gauke, the exchequer secretary to the Treasury outlines the unfair treatment of small businesses by HM Revenue & Customs, while simultaneously agreeing to deals with some of the largest corporations, resulting in unpaid taxes which are estimated at more than £25bn.

The letter was sent by the Forum of Private Business to complain about the way small businesses are being burdened with more red tape, at a time when they are being relied on to create jobs and boost the economy. The Prime Minister recently pledge to take action against tax avoidance, after learning from the Public Accounts Committee that £25bn would remain unpaid by some of the largest companies in the UK. September 2011 saw HMRC extend the Business Records Check project, although only 12 percent of small businesses had presented “seriously inadequate” records.

July 2011 revealed the results of the “cost of compliance” Referendum survey, which shows that small businesses spend £5.1bn each year dealing with the regulatory burden of tax administration. Although HMRC is clamping down on small businesses, it concedes that SMEs shoulder 88 percent of red tape.

According to the Business Records Checks pilot scheme, 44 percent of small businesses have problems with their record keeping. The Forum of Private Business believes that rather than threatening the companies with huge fines, improved guidance, advice and support should be offered to help already struggling businesses to create jobs and boost growth. Calls have also been made for improvement of the tax system, which businesses believe is too slow, complicated and inefficient.

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