HMRC Chase Businesses Despite ‘Red Tape Challenge’

HMRC have begun a spot checking initiative on small businesses which could see them fined for poor business records. The Business Records Checks (BRC) programme, which has already been criticised by the Federation of Small Businesses, will run on a trial until July.

The Chartered Institute of Taxation have also raised concerns following a meeting with HMRC. At this meeting CIOT Deputy President Anthony Thomas was reassured that the programme is currently a “test and learn pilot” with no penalties, other than in exceptional circumstances. However the CIOT still expressed unease, with Mr Thomas saying;

“The CIOT is strongly supportive of efforts to improve record keeping by business, but this is the wrong way of going about it. A good programme to improve business record keeping would involve HMRC and tax advisers working together to educate business about good practice and support them in improving their systems.”

He described the initiative as a “blunt instrument” but was hopeful that HMRC will work with professional groups to best advise businesses and ensure the project is implemented well.

The BRC programme comes despite the government launching their ‘Red Tape Challenge’ last week, which aims to address badly designed regulations and cut red tape. Launching the initiative, Prime Minister David Cameron described the need for well designed and proportionate regulations with less government involvement where possible. He said;

“We need to tackle regulation with vigour, both to free businesses to compete and create jobs, and give people greater freedom and personal responsibility.”

With a number of employment laws currently affecting contractors, such as the incoming AWR, as well as the retained IR35 legislation, it could remain a challenge for the Government to control red tape. Especially whilst they also face the challenge of helping private sector recruitment balance the ongoing public sector cuts.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.