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Get Ready for Business Record Check
Decemebr 2011
We are recommending that small and medium-sized firms within the East Midlands ensure their business records are up to scratch after HM Revenue & Customs (HMRC) announced a plan to investigate thousands next year as part of its Business Record Check.
Over 12,000 businesses across the UK are expected to be visited in 2012 by HMRC representatives wanting to look over business records in an attempt to tackle the amount of tax it loses each year through the poor record keeping of SMEs. This follows a trial of the scheme earlier this year.
Stephen Castleman, Senior Partner at our Leicester head office, comments, “If your company is selected for a Business Record Check we understand you’ll be contacted by a call centre rather than your local tax office. This is simply HMRC’s procedure and nothing to be alarmed about. Each check will naturally depend on the volume and complexity of your records but in theory it should take between two and three hours and will consist of reviewing a random sample of purchases, sales and expenses transactions. These will be rated in a traffic light fashion; green for good, amber for ok but take care and red for watch out and anyone not keeping adequate records could theoretically face a fine of up to £3,000. Those given a red light should also expect closer scrutiny in the future.
We understand that HMRC is initially concerned that records of all transactions exist rather than worrying about their quality, believing that if you have all the paperwork then it will be possible to produce accurate accounts and tax returns at any later time. In effect the Taxman would rather see complete records in a cardboard box than partial ones recorded in a neat computerised system.”
Anyone with questions or concerns about the Business Record Check can contact our Leicester office on 0116 254 9262 or our Loughborough office in 01509 263 500.