From July 2011 HMRC launches Business Record Checks which could
result in large fines...
In December last year HMRC announced the introduction of their
new programme of Business Record Checks for small to medium sized
businesses. If your business is selected by HMRC for a
Business Record Check (BRC), you will be visited at your premises
by HMRC where they will ask to access all of your business
records. If HMRC believe your records to be in a poor state
or that you have failed to keep "proper business records", you may
be charged penalties of up to £3,000 along with additional
tax. HMRC have the power to look over the last 6 years' worth
of records.
HMRC are said to be carrying out in the region of £50,000 BRC's
a year starting from this coming July with the aim of bringing in a
whopping £600 million pounds of fines for the government.
There is also a concern about the possibility of formal tax
enquiries being initiated following these checks.
When HMRC carry out their checks, if it is discovered that there
has been a failure to keep and maintain records appropriately, they
will go through with you exactly what records you should be keeping
so that there is a clear understanding as to what is expected from
you. They will also then decide upon the penalty to be
enforced taking into account the necessary work required in order
to bring your records back into line. HMRC may offer the
opportunity to rectify your records within a certain period of time
before any penalty will be charged.
So, with HMRC carrying out these BRC's in the near future it is
extremely important that you understand what HMRC deem as
satisfactory record keeping. Full guidance has obviously been
issued on HMRC's website ("keeping records for business - what you
need to know") and we have included a link to it here.
If you are concerned about HMRC's Business Record Checks and
wish to speak to us about it, please do not hesitate to contact us
on 0117 904 7755.