Last week’s media circus may have shed light on the shady relationship between HMRC and corporate giants such as Google and Amazon, but while big businesses fudge the books small businesses continue to be hit by it.

The Treasury has a proven record of being less forgiving with small business tax avoidance schemes. In 1999 and 2000 Gordon Brown introduced legislation which included the IR35amendment; meaning that stand-alone contractors operating through a limited company would have to pay income tax and national insurance in the same way as employees of their clients, plus the tax the employer would pay on the employees behalf, plus the tax the company would pay, while enjoying none of the benefits or rights of permanent employees.

As is often the case, limited company consultants employed tax avoidance schemes in the early 2000s to work within this law and mitigate their bills. In the 2008 Finance Act, Brown again introduced clauses pertaining to the IR35, which attacked these schemes and retroactively, ordered the repayment of taxes. This undermined the perfectly legal tax avoidance schemes thousands had employed and left small businesses with unrealistic backdated tax bills reaching in to six figures.

If Google, an ordinary business that operates in the UK, isn’t expected to pay tax like other businesses why should self-starters who have foregone the security and rights granted by permanent employment be taxed as if they were employees? Both small businesses and multinational corporations use tax avoidance to reduce their liabilities but the inequity comes in HMRC’s approach to it.

Similarly, in 2012 the Tax Tribunal found that small businesses were deliberately targeted by HMRC delaying late payment notices to hundreds of thousands of small firms to generate cash from late payment penalty fines. HMRC profited tens of millions from this underhand scheme and when questioned, claimed they had no responsibility to provide reminders.

On top of this, in the face of repeated calls for small businesses to be removed from the business rates system entirely- which would cost the Treasury around£700m of the overall £26bn take – corporation tax has been cut from 28pc to 18pc since 2010 (predicted to cost the Treasury £2.47bn annually by 2020) despite the UK already having the lowest rate in the G20. By transferring those cuts George Osborne could relieve 1 million small businesses of their business rates bill 352 times over. Or in real terms, this money could be channeled toward removing business rates for SMEs, setting up BIDs in regions with high vacancy rates, improving rail and road connectivity to struggling towns or subsidising SMEs pushed out of London’s city fringe by soaring rents as giants like YouTube and Google move in.

Thankfully small businesses have not remained quiet over the preferential treatment; the small village of Crickhowell in Wales devised a plan to take its small businesses offshore last year in a move that mirrors the tax avoidance schemes used by companies like Google and Amazon. George Osborne responded that he would introduce a ‘Google Tax’ to close the loopholes the protest intended to highlight. Unsurprisingly, far from legislating to fill in any gaps, this month HMRC admitted it had ‘reached an agreement with Google’ which would see it pay 2.83% of the £4.6bn generated by sales in the UK.

However, when applied to small businesses HMRC’s approach to collecting its dues is much different. Far from reaching a mutual agreement with the taxpayer, HMRC has issued contractors and small businesses in the IR35 case with Accelerated Payment Notices while judicial review is still ongoing. This grab and run approach to settling questionable taxation procedure with small businesses is an example of HMRC’s broader ‘cash-cow’ treatment of SMEs in particular.

One of the guiding principles of a good tax is that it is universally applicable without discrimination. The UK’s system does not stand up in this regard; while a deliberate blind eye is turned to those with the loudest voices and biggest coffers in favour of tripping up small businesses there is certainly not any chance of a level playing field.