On 17 December 2010 HMRC announced their intention to roll out a programme of Business Record Checks in the second half of 2011. At present they are consulting with professional organisations regarding the scope of their enquiries. This consultation will be completed and the results published by 31 March 2011.
If your business is selected HMRC staff will visit your premises and ask for access to all your business records. If they feel that there is a significant failure to keep proper records penalties may be charged and additional tax assessments raised.
HM Revenue & Customs are going to use existing legislation to check business records in up to 50,000 cases annually. Businesses targeted will have 250 employees or less and turnover below 50m Euros. (At present exchange rates just over £40m). Checks will begin in the second half of 2011 and HMRC will impose penalties for significant record keeping failures.
Once HMRC are aware that your record keeping is defective this will no doubt trigger visits from a number of their departments. You may get additional PAYE/NIC or VAT audit checks for instance.
We’ve got a another free diagnostic tool on our website, just to check if your records are likely to be OK. It’s at www.hixsons.co.uk. It only takes a few minutes for a lot of peace of mind.
Clearly this is not an issue to ignore. Are your records in shape? Will they pass an inspection? Yet again we have a situation where smaller businesses are faced with additional pressures from the taxman. Unfortunately the threat of a visit is unlikely to go away. Be prepared!