| HM Revenue & Customs
(HMRC) is to carry out a review of its
Business Record Checks project, designed
to tackle poor record-keeping by small and
medium-sized enterprises. In September
2011, HMRC said it planned to complete up
to 12,000 checks by the end of the current
financial year with 20,000 provisionally
planned for 2012-13. Following pilot
schemes in eight areas earlier in the
year, HMRC found that 44 per cent of
businesses visited had issues with
record-keeping and around 12 per cent had
seriously inadequate records.
But on 22 December, the Chartered
Institute of Taxation (CIOT) reported that
HMRC had started a detailed review of the
Business Records Check (BRC) project, in
which the CIOT, along with other
professional and representative bodies,
has been invited to take part.
An HMRC statement said: “The purpose of
the review is to consider the overall aims
of BRCs, examine whether the current
approach is the best way of achieving the
policy objectives and identify what
changes are needed to ensure that the
objectives are achieved.
“In the meantime HMRC will continue
with a limited number of BRC pilots and
the results of them will be evaluated as
part of the review. HMRC expect to report
initial findings in early 2012.
“Given the concerns over possible
penalties, HMRC would like to take this
opportunity to reassure taxpayers and
agents that HMRC will not (except in
extreme cases such as where a taxpayer has
no records or has destroyed them) be
seeking to use the record-keeping penalty
provision during the pilots. No such cases
have been identified so far.”
HMRC had previously said that in the
longer term it planned to issue penalties
of up to £3,000 for serous inadequacies in
record-keeping. It launched the BRC
project over concerns that poor
record-keeping made it more difficult for
businesses to pay the right amount of tax
at the right time, as well to keep track
of their trading position and
profitability and to make key decisions.
LINKS:
HMRC guidance on keeping records
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