Are you on the list for a HMRC Business records check?
HMRC continue to increase the number of checks they make into business and personal tax affairs year on year. This is all part of the general tax fraud clampdown.
Business Records Check (BRC)
In 13/14 they carried out 5,500 reviews of businesses records, a 60% rise on 12/13 where they reviewed 3,400 and it is projected to increase again in 14/15.
Despite the fact that around 75% of the checks made have no major concerns, HMRC still have this high on their radar.
Apart from their own interests in ensuring the correct amount of tax is being paid from a business maintaining accurate records, HMRC are making an effort to work with business owners to improve their business operations rather than just dishing out hefty fines from the start.
How does the BRC work?
Typically, the process will be a staged approach, broadly as follows:
Telephone call from HMRC saying you have been targeted for a BRC. They will discuss your current record keeping procedures to see if you are at risk of defaulting regulations.
If there is cause for concern, HMRC will book a visit, which will involve further analysis to understand your current system after which HMRC will provide guidance on any improvements required.
A follow up visit will be scheduled for around three months to ensure the required changes have been made, giving business owners the chance to comply before they are issued with any penalties.
Failure to comply could result in penalties between £250 and £3,000.
This process isn’t prescriptive for all businesses targeted under the BRC, however this is a likely scenario.
Are you at risk of being targeted?
The answer is potentially “YES”
Criteria for the target list under the BRC programme includes any business with turnover under £30 million and covers Income Tax and Corporation Tax so includes sole traders, partnerships and limited companies.
For an initial pre-assessment to see if you are compliant, call Figurit today. Our team is trained in many useful and efficient accounting and bookkeeping systems so can offer you sound advice. Call today on : 020 7376 9333