Taxation update
from Fitzgeralds Chartered Accountants 15^th  June 2011

HMRC publishes Briefing Paper to Explain Status and Extent of Current Business
Record Checks

HMRC has
published a briefing paper to explain the status and extent of the Business
Record Checks currently being carried out in some parts of the country.

Key Points of
the Paper:

Ø  Purpose of
checks is to improve the record-keeping procedures of small and medium business
customers.

Ø  Tests are
currently taking place and involve 30 HMRC staff in 8 locations.

Ø  An estimated
1,200 checks will take place depending on the outcomes of the early stages of
the trial.

Ø  The BRC
initiative does not insist on a specified format for business records.

Ø  HMRC has no
intention of charging any penalties for record keeping failures during the
checks

More details:

‘The purpose
of HMRC’s BRC initiative is to improve the record-keeping procedures of small
and medium business customers and thereby develop those customers’ ability to
comply with their statutory record-keeping obligations.

Following a
recent consultation document period, ending in March 2011, HMRC is testing BRC
using 30 HMRC staff in 8. It is estimated that up to 1,200 BRC visits will be
undertaken in this period depending on the outcomes of the early stages of the
trial. BRC cases will be selected using HMRC’s existing risk engines and
procedures.

HMRC would
like to clarify that the BRC initiative does not insist on a specified format
for business records, but checks whether the records of all business income and
outgoings are recorded in a way appropriate for the size and nature of the
trade.

HMRC
understands concerns around the additional burden placed on businesses by the
introduction of the BRC initiative, but expects that additional burden, in
terms of time and cost, to be outweighed by the long term benefits for
businesses of having good record keeping routines in place.

HMRC would
also like to confirm that it has no intention of charging any penalties for
record keeping failures during the current phase of testing and continues to
review its long-term planning around the introduction of such a charge in the
future. Again HMRC is grateful for agent body input into that planning.

HMRC would
like to provide the agent bodies with assurance that its staff involved in BRC
activity have received supporting study packs and attended face to face
learning events written and delivered by experienced compliance trainers. All
BRC learning materials have been reviewed by senior HMRC technical and learning
managers.

HMRC intends
to continue to work together with agent bodies on improving record keeping by
businesses and the risks involved in businesses applying poor record keeping
procedures. Within this context HMRC will continue to speak to agent and
business representatives on the development of BRC during and after the current
testing phase.’

Ø  43
separate tax reliefs are to be scrapped as part of a simplification of the tax
code.

Ø  A promise
of no new regulation for firms with fewer than 10 staff for three years.

Ø  The rate
relief holiday for small businesses has been extended to October 2012.

Ø  The
introduction of new regulations will require planners to prioritise growth and
jobs.

Ø  21 new
enterprise zones are to be created.

Ø  £100
million extra to be invested in new science centres.

If you need more information or would like
to talk the implications through for your business please contact us 020 8870 0954 or email us at info@fitzgeralds.co.uk