By: Brian Foster
This year will see the introduction of the new “Business Records Check.” The checks will be carried out by the HMRC and over the next few years they project raising £600m in taxes and fines!
To launch this new type check, HMRC will endeavour a visit to 50,000 small to medium size business’s this year.
Why? Apart from the obvious (Tax gathering) they are about to try and ensure that business’s, their Directors, Partners and Self Employed “pass” and on site visit of business records been acceptable!
What is acceptable? …..
Proof of income and outgoings all been physically recorded to ensure HMRC can accept Tax Returns as accurate and giving full disclosure! Visits will be made by appointment and cannot be avoided.
Records Guidance As Seen By HMRC:
Good Records.
Will have documented acknowledgment of adequacy. Therefore lower risk of compliance checks.
Minor Record Failures.
Explanation to taxpayer of findings.
Actions expected to “streamline”.
Further risk of future compliance checks.
Bad Or No Records.
Explanation of what is wanted and further expectations.
Penalty levied (nil-£3000!)
Likelihood of further and other checks.
The levels of fine levied can be up to £3000 initial!
What Constitutes….
Records acceptable should be fully documented, supported by receipts, and invoices for incomings and outgoings.
Retailers should have printed till rolls and orders and dispatch notes should be kept by traders, companies etc other than retailers.
Investigations.
It is quite clear that the proposed visits can be the prelude to full HMRC investigations. This route is particularly traumatic, expensive and can result in earlier years being assessed.
Conclusions.
• Will you be selected for Business Check?
• Are your records for the Business robust and capable of examination?
• If in doubt – have a check made by respectable Accountants/Tax Consultants.
For more information contact:
Brian Foster – Accountant/Tax Consultant
T. 01922457201
brianafoster@aol.com
M. 07831774655
