HMRC Results from Business Record Checks so far – will they start again in April?

BRC are short, face-to-face, real time interventions which aim to encourage greater voluntary compliance in record keeping among small and medium business enterprises (SMEs). They aim to put the customer on the right record-keeping footing and so save costs the business might incur as a result of inadequate record keeping.

Click to access review.pdf

HMRC were carrying out Business Record Checks under their existing powers in Schedule 36, FA 2008. They had set a target to make 50,000 visits, this then dropped to 20,000 visits and after just 2,437 record checks, on the 3rd February HMRC announced that it was to postpone making any new business record check appointments until a revamped approach is launched early in the 2012/13 financial year.

So how did the checks go:

Total number of visits 2,437

61% (1,495) of businesses received a “green” rating – which in HMRC terms means they were satisfactory or better

28% (681) got an “amber” rating – meaning there were some issues

11% (261) got “red” – meaning they get follow up and if they don’t improve face fines of up to £3,000

Number of follow up visits 61 percentage improved to Green assessment 80 per cent
percentage improved to Amber assessment16 per cent percentage with no improvement 3 per cent

A key problem has been agreeing what constitutes poor record keeping


One thought on “HMRC Results from Business Record Checks so far – will they start again in April?

  1. Steve,

    One reason HMRC have been “persuaded” to suspend their business records checks is that they have exceeded their brief. One of my clients had such a check, which I attended. The questions went far beyond checking the document trail (for example, straying into questions about debtors and creditors – my client is a small trader and not a limited company). And this was not the zeal of the person sent by HMRC, she was working from a head office “script”. So various of the professional bodies have asked that the original purpose be restored or the checks permanently suspended. Right now it would seem that these are being used in cases where HMRC is loth to launch a full, formal investigation.

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