Concern has been expressed regarding a ramping up of HM Revenue and Customs' Business Record Checks programme set to take place in April, with many small businesses fearing that the potential GBP3,000 fine which can be imposed if they fail to provide tax inspectors with access to receipts and records to support their tax returns may push them into insolvency.

According to reports, HMRC plans to inspect up to 20,000 small businesses in the coming tax year. Groups representing SMEs and micro-businesses in the UK have argued that the scheme runs counter to government commitments to reduce red tape for small businesses in the current difficult economic climate. They have also suggested that the move is hypocritical given the recent revelations regarding "sweetheart deals" reached between the tax authority and various large businesses found to have ducked their tax obligations.

In a report published before Christmas, the parliamentary Public Accounts Committee accused HMRC of being too lenient on large companies with outstanding tax liabilities.

The Committee alleged that there are "systemic failures in the management of tax disputes" at HMRC after information surfaced on deals alleged to have taken place with significant tax debtors.

It is alleged that HMRC negotiated with large firms to reduce back tax bills, and the report suggests the issue could be more widespread."

A mistake admitted by HMRC in a case involving Goldman Sachs, was said to have cost UK coffers GBP20m (USD31m), although HMRC dismissed this figure in its response, suggesting a figure of GBP5-8mn, based on the estimates of the Comptroller and Auditor General.

A further dispute, with mobile telecommunications group, Vodafone was alleged to have been settled at a significantly lower level than the full amount of the tax liability (GBP1.25bn, against a reported GBP6bn tax bill).

"The Department's working practices must be seen by the taxpaying public to be absolutely impartial. The impression being given at the moment is quite the opposite, of far too cosy a relationship between HMRC and large companies," Margaret Hodge, Chair of the Committee of Public Accounts observed at the time, continuing:

"In several cases, HMRC chose to depart from its normal governance procedures. It is extraordinary that the same officials who negotiated deals also approved them. In one instance, a mistake led to a potential GBP20m of interest on a tax liability not being collected. Parliament and the public must be assured that settlements do not short-change the Exchequer."

Responding to the report, a spokesperson for HMRC stated: “HMRC treats all taxpayers even-handedly, supporting the majority who comply with their duty to pay their taxes, and cracking down hard on evaders, avoiders and fraudsters. It is wrong to suggest that HMRC officials are too lenient on large businesses. Large businesses pay around 60% of total UK tax receipts, and account for more than half of the GBP13.9bn additional compliance revenues that we brought in last year.”

The tax authority has reportedly sought to play down the possibility of fines for small businesses which have not kept adequate records under the newly 'beefed up' record checking programme, framing the planned increase in business record checks as part of an ongoing review into the process.