Expert Commentary: Business Record Checks Re-Start - Firms urged to review their records

In this commentary, one of Mitchell Charlesworth's specialist Tax Partners, Tim Adcock, suggests that small firms should review their accounting records after HM Revenue and Customs (HMRC) announced plans to relaunch its Business Records Checks (BRC) programme:

Tim Adcock

"HMRC plans to start visiting businesses in the North West and North Wales from January 28th 2013 to tackle perceived poor bookkeeping records.

The new style Business Record Checks applies at a much lower standard as compared to the previous programme. It accepts that HMRC are not entitled to dictate what records a business keeps. The department's concern should solely be whether the figures of trading income shown in the return will be correct and complete and that is basically all that HMRC now look at on a BRC visit.

Except where there are no records at all, HMRC will not impose a record keeping failure penalty at the initial BRC visit. They will allow the taxpayer to improve their records. It is only if they choose not to do so that there will be a risk of a penalty. HMRC intends to impose a fixed penalty of £500 (with higher penalties for repeat offenders). HMRC have discretion regarding penalties and so they must consider whether it is appropriate to levy a charge. It is anticipated that, in practice, penalties are likely to be rare.

There is some concern that keeping poor business records could have knock-on effects for firms. If HMRC realise that your books are not up to standard, there is a good chance that they will infer that your tax returns have been inaccurate, leading to a possible enquiry and a potential penalty.

Mitchell Charlesworth can help, however, in a number of ways. We are SME specialists and as a bigger firm we have in-depth expertise in a number of complex areas including audits, bookkeeping, tax and VAT. We also offer Premier Protection - Investigation Insurance to guard firms against the costs of dealing with HMRC investigations."

For more information about how Mitchell Charlesworth can help your business with its accounting records, or to enquire about our Premier Protection service, complete a quick enquiry form or contact your local office.

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