If you find it difficult to gather all the relevant paperwork and crunch the necessary figures to fill in your tax return when you have months to prepare for a known deadline, then be grateful you’re running a small business in the UK – and not in Málaga, in Spain.
Business owners in Málaga are complaining about a huge tax crackdown campaign that has been occurring in the region throughout August, a period of time when many of them are on holiday – as are numerous administrative staff, accountants and tax advisors.
Businesses of all types and sizes, from petrol stations to department stores, have received unexpected visits from tax inspectors – and been given ten days to produce a variety of paperwork including utility and energy bills, IVA returns, IBI receipts, lease and rental agreements or property ownership documents. But the owners of many of these businesses say that with the staff members who deal with documentation and tax matters absent, this deadline is unreasonable, and proving impossible to meet – even with the threat of a non-compliance fine of up to 400 EUR and a full inspection hanging over their heads.
Revealing the Submerged Economy
Around 2000 of these surprise visits now occur in Málaga every year as part of the Spanish Treasury’s attempt to uncover Málaga’s ‘submerged economy’, which centres around fraudulent benefit claims, illegally employed and unregistered workers and tax evasion. Last year Gestha, the Tax Office workers’ union, estimated that the province’s submerged economy was worth around 8bn EUR – over a quarter of the GDP.
Currently the number of businesses in Malaga has reached its highest point since 2008, but 87% of Malaga’s employees work in the service sector – the sector which employs a great many temporary workers in hospitality and tourism, a hotbed of unregistered and illegally employed workers. Employers found guilty of employing these workers face a minimum fine of 3,126 EUR.
So if you need an incentive to start sorting that paperwork and contact an accountant now (check out our accountant page) – rather than halfway through October – why not paint your windows blue, switch on a heater and a big UV lamp, and pretend you’re in Málaga.
Feeling the pressure now?