HMRC have announced their intention to roll out a programme of Business Record Checks in the second half of 2011. At present they are consulting with professional organisations regarding the scope of their enquiries, and running pilot areas as trials.
If your business is selected, HMRC staff will visit your premises and ask for access to all your business records. If they feel that there is a significant failure to keep proper records, penalties may be charged and additional tax assessments raised.
Here’s what we know so far:
HMRC’s objectives:
* Use existing powers to check business records in up to 50,000 cases annually.
* Businesses targeted will have 250 employees or less and turnover below 50m Euros. (At present exchange rates just over £40m)
* Checks to begin in the second half of 2011.
* Impose penalties for significant record keeping failures.
Issues to be resolved by present consultation process:
* Arrive at a clear understanding of record keeping obligations; primarily what records do you need to keep.
* What level of penalty should be levied to bring about the required changes in defective record keeping, and
* Should HMRC allow a “cooling off period”, before penalties are charged, to give businesses time to remedy substandard record keeping.
The consultation is not concerned with whether HMRC should have powers to check business records, these already exist!
If HMRC are aware that your record keeping is defective this will no doubt trigger visits from a number of their departments. You may get additional PAYE/NIC or VAT audit checks for instance.
It is fairly clear that the Government expect to raise a considerable amount of additional revenue through the business record checking programme. It should therefore be taken seriously by business owners. Particularly those whose records might be less than adequate.
You can use our business record checker to review the quality of your records.
The business record checker is an online questionnaire which will create a report for all visitors to our web site so you can gauge the likely response from HMRC should you receive a visit! We do not charge for the use of this facility.
When you get your report please feel free to contact us if there are any issues raised you would like to discuss, or, if you would like our help to bring your record keeping up to scratch. The questionnaire is easy to complete, just Yes No replies. Be assured that the report you receive is provided in complete confidence. No agency or person unconnected with our practice will have access.
