Fury over letters from taxman

THOUSANDS of small business owners are demanding an apology after they were sent letters by the Inland Revenue suggesting tax returns may be incorrect.

The so-called 'enabling' letters, sent to 100,000 businessmen and women, warned of some of the most common mistakes made when tax returns were filed. But criticism is centred on the vagueness of the mailshot, which does not explain whether the recipient will be the subject of a full-blown investigation by the taxman.

'These letters are a disgrace,' said Neil Hamper, tax chairman for the Federation of Small Businesses (FSB). 'They have created a wave of confusion and anxiety by suggesting a specific problem has been identified when in fact they have been generated by a computer on the basis of standard triggers.'

A full list of the criteria used to generate the list has not been made available. However, businesses claiming high travel, corporate entertainment or advertising costs, or paying wages to a family member are likely to have been at the top of the list.

A spokesman for the FSB said: 'It's another example of a failure in communication by the Inland Revenue.

'A more public notice on tax returns, not directed a specific individual, would have been better.'