HMRC Business Records Checks Extended
A programme set up to check the business records of SMEs has been extended, following a successful pilot earlier this year.
After testing the scheme through around 800 business visits in eight areas, HM Revenue & Customs now plans to complete up to 12,000 business records checks by the end of the financial year. That number is set to rise to 20,000 in 2012-13.
The number of visits undertaken will increase over the coming months before a final decision over a national roll-out is taken in the new year.
The pilot found that around 44% of businesses visited had record-keeping issues, while around 12% of those visited had seriously inadequate records.
At first, HMRC will only levy a penalty in the most extreme cases of poor record-keeping, but in the longer term there will be penalties issued of up to £3,000 for serious inadequacies. A further announcement from HMRC with more details of when this will happen is still to be made.
HMRC’s Director of Local Compliance, Richard Summersgill, said: ‘Good record-keeping helps businesses pay the right amount of tax at the right time, thereby potentially avoiding interest and penalties.
‘Ultimately, this is about supporting businesses and reducing the tax gap.’
Poor business record-keeping is responsible for a loss of tax in up to two million SME cases each year.