Orange & Gold Blog

Business Record Checks: where now?

HMRC is continuing to pilot its Business Record Checks initiative on some 20,000 small businesses. However, it has responded to objections and in December 2011 decided to undertake a strategic review of the project.

Business Record Checks have proved highly controversial on two fronts:

1) HMRC announced a continuation of an initial pilot before it had evaluated the first stage pilot, and

2) HMRC is intending to charge taxpayers penalties of up to £3,000 for any failures to keep records using section 12B TMA 1970 – records to be kept for the purposes of returns.

HMRC's statement summarises the current position:

“HMRC recognise that the launch of the BRC pilots has caused considerable concern to the tax profession and that the project would have benefited from more detailed consultation with tax professionals at an earlier stage. In the light of these concerns, HMRC will undertake a strategic review of the project in consultation with the professional and representative bodies. The purpose of the review is 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. “

HMRC expect to report initial findings in early 2012.