The Taxman is coming…. Business Record Checks restart this month … are you ready? Reply

A pilot programme of Business Records Checks (BRC) began in April 2011. This involved checks by HMRC on the adequacy of Small and Medium-sized Enterprises’ (SMEs) statutory business records. SMEs are businesses with an annual turnover below £30 million who employ less than 250 people.

Up until 17 February 2012, 3,431 BRC had been carried out. These found that 36 per cent of businesses had some issue with their record-keeping of which 10 per cent had issues serious enough to warrant a follow up visit.

HMRC will be sending out letters this month to businesses that it believes may be at risk of keeping inadequate records, advising them that it will be in touch by phone. The call will take businesses through a set of questions designed to assess their record keeping affairs.

The BRC programme will be rolled-out, region-by-region, over the following 14-week period;

  • London & East Anglia – 26 November 2012
  • South East England – 14 January 2013
  • Scotland – 14 January 2013
  • Northern Ireland – 14 January 2013
  • Central England – 21 January 2013
  • East of England – 28 January 2013
  • North Wales & the North West of England – 28 January 2013
  • South Wales & the South West of England – 4 February 2013

You can read the full HMRC report by clicking on this link http://www.hmrc.gov.uk/businessrecordscheck/review.pdf

Further information at http://www.accountingweb.co.uk/article/hmrc-re-launches-business-records-checks/533378

steve@bicknells.net

HMRC Results from Business Record Checks so far – will they start again in April? 1

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.

http://www.hmrc.gov.uk/businessrecordscheck/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

steve@bicknells.net