News: March 2012
Business record checks – review, suspension and relaunch
The pilot programme of BRCs began in April 2011 and involved checks by HMRC on the standard of small and medium-sized enterprises’ (SME’s) statutory business records. Up to 4 January 2012, 2,437 BRC’s had been carried out. These found that 28% of SMEs had some issue with their record-keeping, and an additional 11% had issues serious enough to warrant a follow-up visit.
HMRC undertook a strategic review of the project in consultation with the professional and representative bodies. The purpose of the review was to consider the overall aims of BRCs, examine whether the current approach is the best way of achieving the policy objectives and identify what changes are needed to ensure that the objectives are achieved.
As a result of the review, the scheme has been suspended! However, don’t celebrate too much as it will be relaunched early in the 2012/13 tax year with a fresh approach. This will partly involve:
- Collecting far less revenue than originally forecast
- More focus on businesses considered to be at a higher risk of keeping poor records
- No penalties charged unless poor records lead to an incorrect tax return.
This is all good news and at last HMRC are being sensible about how to operate BRCs.