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HMRC breaks business checks record

HMRC’s inquiries increased by 2,084 in the last financial year to 5,515 – a rise of 60 per cent, according to the tax investigations experts at PfP.

Yield is likely to also rise, increasing by £36m in the same period.

HMRC began the scheme in order to target those businesses that have been less than proficient with record keeping, thus potentially resulting in an underpayment of tax.

While HMRC cancelled its larger plans to investigate a possible 50,000 businesses a year, there has still been an increase in on-site inspections.

The record checking scheme was delayed more than two years ago and reviewed after business groups and accountancy firms rebuffed it.

The review led to a change of approach, as it was found that most companies maintained sufficient records. However, the ratio of checks found with no significant imperfections versus those with them has risen since the review – by 9 per cent to 73 per cent, said PfP.

Kevin Igoe, managing director of PfP, commented:

“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.”

This should serve as a warning to Wirral-based companies to ensure that they have a workable and accessible system when it comes to maintaining their records. They would be wise to enlist help, and a reputable accountant in the Wirral will have all the experience needed to ensure they are not on HMRC’s record checks radar.

Posted by Mark
August 7, 2014
Tax

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