HMRCs Business Records Checks Underway

HMRC’s Business Records Checks (BRC), which is running on a pilot test, will see up to 1200 business visited over the next few months. The BRC visits, regarding companies record keeping, will trial in 8 cities; Edinburgh, Irvine, Manchester, Liverpool, Stockport, Sunderland, Sheffield and Portsmouth, and will take place between 4^th April and 15^th July this year.

HMRC have claimed that although they are placing additional burden on business with this new BRC initiative, in terms of costs and time, they believe the long term benefits will outweigh these issues as it will lead to business keeping better records in the future. They have also confirmed that this trial period will not incur any penalties.

Tax advisors Smith and Williamson have warned business to keep full records from up to six years back to be safe and in order to comply with HMRC’s standards. Richard Mannion, national tax director of the group, said; “This new approach heralds a sharply toughening attitude to SME record keeping by HMRC.”

“Business owners should take these warnings very seriously. If they don’t keep good records, they may be unable to substantiate tax returns and so would have difficulty in proving their figures are correct. They could therefore end up with an extra tax demand and even a fine.”

This comes as HMRC announce plans to hire over 1,100 temporary workers to help chase unpaid tax bills. Around 1.4m people were sent tax demands for over £3.8bn last year as HMRC had problems with the PAYE tax system and made errors with millions of tax bills. This is the latest move into trying to improve HMRC efficiency.

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