04-07-2016

Ensuring your SME is appropriately covered is an essential way of guaranteeing an accident or emergency situation has minimal effect on your business and its profitability. However, many UK business owners have been left disgruntled after struggling to enquire about tax levels and learning that tax funds are being misspent.

Where Has the Money Gone?

We help people compare business insurance policies to get you the best deal possible, but not all of your money is spent so carefully. An independent watchdog has found that calling HMRC cost taxpayers an astounding £97 million last year.

Thanks to a poorly executed online strategy, staff cuts which caused a 'collapse in service quality', and a spike in costs, millions of taxpayers' money has been wasted. This figure is calculated including factors such as:

• Time spent to resolve taxpayer queries
• On-hold time
• Potential loss of revenue for business owners whilst on hold or waiting for a response

The National Audit Office has calculated that the average person's time is worth £17 per hour. This means that £66 million of this total was lost due to taxpayers being left on hold. £21 million was lost whilst on the phone, whereas the remaining £10 million was wasted on call time.

It appears that this has happened after a plan to reduce the cost of calls has backfired. HMRC has been rolling out a contactless service, which includes self-assessment, for the past few years. As part of this, they cut 11,000 call staff, assuming they wouldn't be needed anymore.

Sadly, HMRC was wrong and consequently there was not enough staff to answer the number of calls received, hence the hold time.

Fixing the Tax Issue and the Coming Year

HMRC claims to be improving its service and call waiting time is now down to just 6 minutes, however many businesses and individuals will be anxious to find out if they have been paying the right amount of tax after not being able to get through.

If your business has been affected by this mishap or a similar issue, you may wish to consider liability insurance so that your business maintains a healthy cashflow and does not take a hit should an accident occur.

Liability insurance is the minimum cover recommended and is available in liability levels up to £10million. This will cover many aspects of a claim, including:

• Legal expenses
• Tool cover
• Employer's liability cover
• Business interruption cover
• Product liability cover

Compare quotes for liability insurance or learn more about other forms of business cover here. .