SMALL traders in South Lakeland whose annual turnover has remained just below £15,000 for two years are facing a tax purge, say chartered accountants.

Individuals who declared earnings of between £14,000 and £14,999 in consecutive years are most likely to be singled out

for an inquiry by the Inland Revenue.

Self assessment tax returns do not require full accounts to be submitted unless turnover exceeds £15,000, leading to suspicions that many are failing to declare their full income or inflating business expenses.

Russell Longton, of the North West Society of Chartered Accountants, said people doing some freelance work, or running small, possibly part-time businesses were most at risk.

"The Inland Revenue says they are substantially increasing the number of inquiries in this category, so people should

ensure that their returns will stand up to close examination," he said.

"If there is no explanation, tax officials will wonder why turnover has not been increasing, and may suspect income has been manipulated to be kept just below £15,000."

Peter Bickley, technical manager at the Institute of Chartered Accountants' Tax Faculty, said the Inland Revenue was copying a purge in Australia, where a similar campaign recovered a significant amount of unpaid tax.

l Small businesses seeking financial advice should ensure they engage an accountant who is properly qualified and experienced, warns the Association of Chartered Certified Accountants.

Unlike many other professions, such as solicitors and doctors, there is no legal control over the use of the title ' accountant', says ACCA.