How mid-sized businesses can get help with tax issues

If you own a mid-sized business, dealing with tax obligations could be time-consuming.

However, following UK tax regulations is essential to stay within the law and avoid penalties.

Understanding your tax duties can also support your business’s growth.

Deliberate tax avoidance and financial difficulty aside, some underpayments could be down to errors in tax calculations and misunderstanding of tax laws.

HMRC is working to provide additional support for mid-sized businesses, helping organisations better understand and pay the tax they owe.

What is a mid-sized business?

A mid-sized business is one that has:

• a UK turnover above £10 million
• and or more than 20 employees.

Large or small businesses can also find relevant guidance and support on the HMRC website.

What help can I get?

As a mid-sized business, you can get help from HMRC with a tax issue if:

• you can’t find the information you need on GOV.UK
• there isn’t a specific HMRC team you can contact for help.

The Mid-sized Business Customer Support Team will assist with your query or direct you to someone who can help.

Agents can also use this service on behalf of their mid-sized business clients.

If you’re a growing mid-sized business, you might also be eligible for extra support from the Growth Support Service.

You, or your agent, can also request a temporary Customer Compliance Manager (tCCM) if your business has complex tax affairs.

They act as a direct contact to HMRC and specialists to help you with tax issues that are affecting your business.

They can help if you:

• are going through a business cycle event
• are experiencing a period of significant growth
• have multiple open tax enquiries
• have multiple complex tax issues
• have a significant volume of contact with HMRC.

Common challenges mid-sized businesses face

If you own a mid-sized business, you may need to pay various business taxes.

The Mid-sized Business Customer Support Team could help if you are facing challenges understanding these.

Depending on your specific business operations, your taxes might include the following.

Corporation Tax

This is a tax on the company’s profits, including trading income, investment income, and capital gains.

Understanding your Corporation Tax obligations – including deductions and credits – is vital to avoiding paying too much or too little in tax.

R&D Tax Relief

When dealing with research and development (R&D) Tax Relief, it’s important to know if you qualify and how to apply, as this can be complicated.

Knowing how to claim capital allowances on investments in business assets is also key, as it can greatly affect your tax responsibilities.

Value Added Tax (VAT)

VAT is charged on most goods and services provided by VAT-registered businesses.

You must register for VAT if your turnover exceeds the VAT threshold, which is currently £90,000.

Handling VAT registration and filing accurate returns can be tricky, especially with frequent rule changes.

Many businesses need help managing their payments.

Pay As You Earn (PAYE) and National Insurance Contributions (NICs)

PAYE is deducted from employees’ wages by employers.

If you hire people for your business, you must also pay NICs based on their salaries.

Recording these accurately is crucial, as errors can lead to penalties.

Customs Duty

Customs duty applies to goods imported into the UK.

Rates depend on the type of products you are importing and where they are from.

If your mid-sized business is involved in import/export, managing customs duties and understanding trade rules is very important, especially post-Brexit.

UK businesses must follow specific customs procedures and tariffs, so understanding trade rules is essential to avoid delays and additional costs.

Apprenticeship Levy

The Apprenticeship Levy is paid by employers with an annual pay bill over £3m.

It’s calculated as a percentage of the total pay bill.

You may need guidance about calculating and reporting the levy or complying with funding rules.

Getting additional help from the Growth Support Service

The Growth Support Service offers additional guidance for businesses that are expanding.

It helps mid-sized businesses understand new tax issues, ensuring they comply with tax laws before filing returns.

The service also provides advice on accessing financial tax incentives and reliefs.

Additionally, it offers essential insights into reporting and governance risks that come with business growth.

These services help mid-sized businesses manage and resolve tax issues efficiently, ensuring compliance and supporting sustainable growth.

To be eligible for this support, your business must meet specific growth criteria, including:

• your business is about to or has increased turnover by over £1m, and by more than 20% in the last year
• you will increase or have increased your balance sheet by at least £1m and more than 20%
• your business will be growing or has grown in a merger
• your business is expanding or has expanded through acquisitions
• you are restructuring within a group to grow your business
• you plan to export or have exported services or goods from the UK for the first time
• you are listing shares on the stock market
• you plan to or have informed HMRC about the Senior Accounting Officer (SAO) and submitted an SAO certificate for the first time
• you are about to pay or have paid corporation tax or VAT on account for the first time
• you are about to or have set up business operations in another country
• you are about to grow or have grown significantly in another way – HMRC will consider your request.

The application process for HMRC support

Applying for HMRC support is a straightforward process.

Here’s a step-by-step guide:

1. Check your eligibility

Ensure your business qualifies as a mid-sized business.

2. Gather the required information

• your Government Gateway User ID and Password (if you don’t have one, you can create one during the application process)
• business contact details, including the name, telephone number, and correspondence address
• Unique Taxpayer Reference (UTR), VAT registration number, or employer PAYE reference
• annual turnover and employee numbers – this is for businesses looking for growth support, include details such as turnover increase.

3. Prepare supporting documents

If applicable, prepare supporting documents related to your tax issue or growth.

Make sure they are less than 5MB each and in a commonly used format like PDF or DOCX.

4. Submit your application

Access the appropriate online application form via the GOV.UK website and fill it out with the gathered information.

For growth support, specify the type of growth and related tax issues.

5. Receive Confirmation

Once submitted, you’ll receive a reference number for tracking your application.

6. Wait for HMRC to contact you

HMRC will review your application and contact you or your representative within 15 working days to discuss the support they can offer.

Contacting HMRC support services is a smart step for mid-sized businesses that want guidance to maintain tax compliance and grow.

By taking advantage of these resources, you can improve your tax management, ensuring your business remains compliant and is positioned for success.

Get help from HMRC with a tax issue as a mid-sized business.