HMRC’s extremely unpopular Business Records Checks initiative is set to be axed, and many in the tax industry are calling it a victory for common sense.
Changes and improvements wouldn’t work
Changing BRC or even replacing it wouldn’t have been sufficient, since many of the improvements it was supposed to bring about were tackled in the wrong way in the first place. The Chartered Institute of Taxation adds that the initiative simply wasn’t cost-effective, even though it had been extensively trialled, then stopped and amended, then revamped yet again.
BRC’s goal was questioned
The goals of BRCs have been under question too. HNRC made a record number of record checks in 2014. But they found the records of around 75% of the companies they had targeted were perfectly OK, even though they had apparently checked businesses it felt were at the highest risk.
HMRC says BRC has “positively encouraged businesses to keep better records”. They discovered they were contacting many more compliant customers than they expected, the reason being that it was tougher than anticipated to identify businesses who would ‘benefit’ from a record check in the first place.
No time for complacency
Some feel a great deal of public money and businesses’ time has been wasted. But even so it highlights the importance of keeping your records in good order at all times. If you run a business, you still can’t be complacent about record-keeping. Even more so because HMRC’s digital tax accounts will be collecting data more frequently than ever.
What if you are currently being checked?
If you’re a limited company or other organisation being checked right now, and have had written notification from HMRC, you still need to go the telephone questionnaire, which helps the revenue decide whether or not you actually need a full check. If not, you’ll be given online help about good record keeping.
If a visit has already been arranged or you’re waiting for a follow-up visit, it’ll still go ahead.
Any questions about keeping adequate tax records?
Feel free to ask us, and we’ll give you sensible, current, plain English bookkeeping advice you can understand, trust and act upon. Or we can take over and do your books for you. What a relief!