HMRC Business Record Check
The HMRC campaign on Business Records Check (BRC) is back, and you need to be wary. HMRC will be selecting small owner managed businesses that have been set up in the last few years, or more established businesses that are handling cash – trades people, retailers and the like. They will then require you to undertake a telephone interview and then they’ll decide if you need further education or if HMRC should visit and inspect your records. Of course there are penalties, these start at £500 (HMRC say this can be discounted to £250) and increase up to £3,000. What is worse is that HMRC can investigate your tax returns and determine that additional tax is due.
We strongly advise you to get professional support and we have prepared a briefing note on How to Survive a Business Records Check
General Tax Enquiries
About a third of all Tax Enquiries are started because the accounts have been delivered late, or there are factors within the accounts that cause questions within the mind of an HMRC Inspector.
“Nothing prepares you for an Inland Revenue Full Enquiry – your books scrutinised, the questions, the allegations. Suddenly I was expected to remember events that happened nearly three years before. And it wasn’t just my business; I had to justify my personal spending on food, clothing the kids, holidays, everything! I was made to feel like a criminal. The Revenue assumes that you have done something underhand even if you have made an honest mistake. It took over a year, but despite the stress I am grateful to my accountant; he cleared my name and because he insisted I insure, it didn’t cost me a penny in fees.”
Accounts prepared by accountants with the experience, reputation and most importantly, track-record of success will help to avoid Enquiries. But there is more to our regular service than just well prepared accounts; we work with clients to improve their record keeping and systems to ensure that “adequate records” have been produced – a common result of an Enquiry is a decision by HMRC that adequate systems and records are not in place.