HM Revenue and Customs' heightened scrutiny of small businesses and contractors is purely a revenue raising exercise, a leading organisation has claimed.

The Federation of Small Businesses (FSB) has asserted that the recent consultation that could lead to spot-checks of company records will target 50,000 small companies and contractors in the unique, with a potential fine of £3,000 for those who do not comply with the necessary standards.

Roger Bibby, economic, tax and finance committee chairman at the FSB, has warned that small firms are already spending more than enough time complying with the tax responsibilities.

He said: "Many small businesses do not have a dedicated finance or accounting department and will be unaware of the intricate details of tax obligations – especially when starting out."

The FSB has also recently called for the government to reverse plans to raise fuel duty due to the effect that this could have on contractors and small businesses.