Could you be called for a Business records check?
HMRC is always looking at ways to ensure tax reporting is as accurate as possible by improving the quality of the records kept by business owners.
Whilst it is in their best interest to do so they are actually trying to work with business owners on this important administrative task and not just jump straight in with penalties and fines.
Who is being targeted for a Business Records Check (BRC)?
This particular programme is targeting sole traders, self-employed and businesses with under £30 million turnover and covers Income Tax and Corporation Tax.
Technically, most doctors and dentists are at risk of falling into one of these categories.
The BRC process
Typically, if you happen to be targeted, HMRC will initially telephone you to discuss the current record keeping procedures of your business. Depending on the outcome, they may then arrange a BRC visit, if there is a concern.
A BRC visit will usually involve help from HMRC on how to keep better records for tax purposes and a follow up visit will be scheduled, most likely within three months.
This gives business owners a chance to rectify their procedures from the training and help provided by HMRC before any penalties are incurred.
If changes fail to be put into place though, fines can be applied between £250 and £3,000 depending on the nature of the errors.
60% more checks year on year
HMRC carried out 5,500 checks in 13/14 compared to 3,400 in 11/12 and it is expected to rise again in 14/15.
Reassuringly though, almost 75% were found to have no significant need for change.
Regardless, they could come knocking so always best to ensure that your record keeping is up to a good standard.
Figurit ensure our clients have access to good, efficient systems to help keep them compliant. For help with business record keeping or any other accountancy and tax matter, call our team to discuss. T: 020 7376 9333