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SMEs FACE CHECKS
ON ACCURACY OF RECORDS |
HMRC are planning a programme of checks that
will review the adequacy and accuracy of records kept by
small and medium-sized enterprises (SMEs).
The programme will use existing law regarding both
record-keeping requirements and penalties for failure to
comply, with sanctions imposed for significant failures.
The Revenue says it conducted a random enquiry programme
that indicated poor record-keeping is a problem for 40% of
SMEs. The department has issued the consultation document Business Records
Checks
to discuss the implementation of a new
programme.
The campaign would begin in the second half of 2011, with
around 200,000 small businesses being selected for one of
the new checks. HMRC expect to raise £600 million over its
first four years.
Information powers legislation introduced in 2008 already
enable the Revenue to carry out real-time examination of
records, but the mooted initiative is nevertheless worrying
for small firms, said Baker Tilly’s Mike Down.
He added, ‘The new checks will be risk-assessed, and
industry sectors will be targeted where HMRC has identified
general problems in the past. This is likely to result in
cash businesses experiencing even more robust and intrusive
investigation than previously.’
Mr Down questioned how the taxman had arrived at the figure
of £600 million in tax to be recovered. The consultation
throws up a number of questions, said Mike. 'For example, do
HMRC have the resources to carry out so many checks? Will
penalties for direct and indirect taxes be harmonised?'
He expressed particular concern that checks would have a
burdensome effect on small firms without accountants,
because they are likely to be more prone to haphazard
record-keeping.
For advice on YOUR BUSINESS RECORDS
situation, and how to keep proper records, contact us Here
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