Preparing for HMRC’s business records check programme
HMRC have issued a press release to coincide with the launch of a number of free tools on HMRC’s website to help businesses ensure that they are keeping proper records. The new tools have been produced in advance of the launch of HMRC’s new ‘Business Record Checks’ programme later this year, which will impose penalties for significant record-keeping failures relating to Income Tax, Corporation Tax and VAT.
HMRC have estimated that failure to take reasonable care in record-keeping leads to a loss of around £6.5 billion in tax every year. The business records checks will apply to the self-employed, sole traders and businesses with a turnover of less than €50m and with less than 250 employees.The objective of the business records check is to:
- Use the powers of Schedule 36 Finance Act 2008 to check business records in up to 50,000 cases annually, beginning in the second half of 2011.
- Impose penalties for significant record keeping failures.
- Bring about an improvement in record keeping across the population of the roughly 2 million SMEs whose records currently fall below standard.
- Reduce the tax losses to the Exchequer that result from poor business records.
No new legislation is necessary for the introduction of the business records checks as HMRC will use existing legislation regarding both record keeping requirements and penalties for failure to comply with those requirements. HMRC will impose penalties for significant record keeping failures.