Business record checks update
The Business Record Checks (BRC) programme imposes penalties for significant record keeping failures relating to Income Tax, Corporation Tax and VAT and applies to the self-employed, sole traders and businesses with a turnover of less than £30m.
According to insurers PFP, HMRC business record checks are on the increase. In the tax year 2013/14 HMRC checked 5,515 sets of business records compared to just 3,431 checks in 2011/12, an increase of 60%. Interestingly, of the records checked 73% were found to have no significant errors.
If HMRC decides to look at your business records they will usually contact you by telephone in the first instance. Depending on the outcome of this call, HMRC will confirm whether further action will be taken. Where issues are identified, businesses will be offered targeted self-help education options. Customers who are assessed as being at risk of keeping inadequate records will be referred for a BRC visit.
Businesses that are referred for a BRC visit and have issues will be offered help to improve their record keeping and will usually be visited again by HMRC officers within three months. If at the follow up visit businesses have improved their record keeping so that their records are adequate, HMRC will reduce any penalty to nil.
If records have not improved to a respectable standard, penalties will apply. The penalties can range from £250 to £3,000.
If you are concerned that your business records may not meet HMRC’s standards please call for an initial consultation to review your record keeping.