PfP explains that the figures relate to work undertaken by two newly created specialist HMRC teams: the individuals and small business compliance unit and the wealthy and mid-sized business compliance unit.

Kevin Igoe, managing partner of PfP, said: ‘VAT investigations into SMEs have proven incredibly rewarding for HMRC.

‘The figure will be driven by a combination of carelessness, genuine error or misunderstanding, as well as deliberate and calculated underpayment.’

Igoe points out that HMRC’s new online cross-referencing database system, Connect, makes it simpler for officers to pick up errors or discrepancies reporting in tax returns, and cautions that as a result anyone mis-reporting on VAT is likely to attract attention very quickly.

‘Whilst the vast majority of SMEs are compliant, the actions of a rogue few mean that HMRC is likely to look closely at the tax affairs of all over the coming months. Many innocent business owners are likely to find themselves under close scrutiny as the Revenue looks to weed out any remaining underpayment,’ he said.