HMRC is extending the new Business Records Checks initiative, following a pilot programme this year. The taxman claims that research shows that poor business record-keeping usually leads to an under-declaration of tax. HMRC reckon they can collect an extra £2M every year by focussing on SME’s poor business record-keeping.
The BRC pilot involved 800 visits in eight different towns across the UK. The taxman says that 44% of SME businesses inspected in the pilot had problems with their record-keeping. And 12% of those records were seriously inadequate.
HM Revenue & Customs will now deploy 120 full-time staff employed on the BRC programme across the country. They aim to complete up to 12,000 Business Records Checks by the end of the current tax year. And they are planning 20,000 Business Records Checks for 2012/13. HMRC intends to issue penalties of up to £3,000 for serious inadequacies in record-keeping.
Business Records Checks look at the business records generally. They are a new feature in addition to traditional tax enquiries and Compliance Checks: which occur after a tax return is sent to HMRC.
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