HMRC changes tack on Business Record Checks

Most small businesses can opt to cancel a face-to-face spot check of their paperwork by the taxman regardless of whether such an initial visit has been booked, according to HM Revenue & Customs.

Unveiling yet another new approach to Business Records Checks yesterday, HMRC said firms outside of five regions could soon choose to receive advice on keeping paperwork “as an alternative to” the initial visit, if it is booked or not.

The five regions excluded from the effective opt-out from the inspection, which cannot be used by firms awaiting a follow-up BRC visit, are Edinburgh, Glasgow, Leeds, Bradford and Stockport, where “new ways of using the checks” will be trialled.

In these five, HMRC will “evaluate new risk processes”, and ensure new approaches to implementing BRC are “cost-effective” and “fit with its wider compliance activity,” from November 4th 2013.

But also from that date, firms in all other regions of the UK who have gone through the initial telephone questionnaire will be offered to take advice on keeping business records, instead of a visit - where HMRC is yet to book it.

If HMRC has already booked the inspection, firms will be offered the same option of similar best-practice tips on keeping records. In cases where the visit is booked or not booked, the advice will be provided by the Business Education & Support team.

At the same time, the Revenue says it will work with tax and accountancy bodies to review the benchmarks of what “good record-keeping” should be, despite HMRC staff manuals recently being updated to address what constitutes “adequate paperwork.”

The bodies, which have expressed concern over the hardship a BRC penalty could impose on the smallest of firms - such as sole-person traders, will be pleased to learn that no BRC fines have been issued for lax records.

In its update, HMRC explained: “Customers whose records were not adequate on first inspection, and who received follow up visits, all improved their record-keeping standard. HMRC have not had to charge any penalties.”


24th October 2013

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