HMRC investigations up 60% - get covered
Posted on in Business News , Cycles News , Creative News, Outdoor News
HMRC steps up business records checks despite scaling down scope of operation
The Business records checks programme operated by HM Revenue & Customs is running at its highest level since its introduction in 2011.
The number of investigations rose to 5,515 in 2013/14 from 3,431 in 2011/12 - an increase of 60%, according to tax investigations specialists PfP.
HMRC started the programme to identify businesses with poorly-kept records, which might lead to the underpayment of tax. For businesses with inaccurate records there is a potential £3,000 fine on top of any unpaid tax, interest and penalties.
HMRC has scrapped its more ambitious plans to visit up to 50,000 businesses per year but the number of actual onsite inspections taking place is still increasing.
In February 2012, the record checking programme was put on hold and sent for review after it received criticism from accountancy firms and business groups, but after a seven-month break the checks began again in November 2012.
The outcome of the review was to attempt a more targeted approach for the checks because it showed that most businesses in fact kept appropriate records. However, the proportion of checks that found nothing significantly wrong with businesses' records has actually increased compared to before the review, from 64% to 73%, PfP said.
PfP managing director Kevin Igoe said: "After the review HMRC said it would try to reduce the burden on compliant businesses by using a more targeted approach. However, the majority of those being reviewed are finding that their business records are sufficient."
Get covered
In most cases if your business is selected for a compliance visit it will be because the HMRC suspect you may be doing things incorrectly. If you file your returns on time, pay your tax on time, and explain any large variations to current year figures compared to previous year figures, then you will be sending a strong message that you know what you are doing, that you understand your responsibilities, and that you are running your business in a compliant fashion.
However, if you are ever sought out for an investigation, ActSmart's subscription packages come with tax investigation protection as standard, so you can be safe in the knowledge that you'll be covered against any of the costs incurred as a result of having to supply information to HMRC.
If you need any advice on what your business is required to do, ActSmart subscribers have 24/7 access to our business support and legal helplines which can help you to stay up to date with HMRC changes.
To make sure your business is covered, join ActSmart today.