HMRC has decided to scrap its controversial business records checks. What implications might this have for your business?
Just checking! In 2011 HMRC started its business records checks (BRCs) claiming it wanted to help businesses identify shortcomings in their bookkeeping. It suggested that this was the root cause of many incorrect tax returns and so wanted to help businesses get it right.
Suspended. BRCs came under fire from the accountancy and taxation professions because it was seen as a backdoor way for HMRC to start investigations. To make matters worse, it soon became clear that its officers were inadequately trained to carry out the checks. Because of these problems BRCs were put on hold while HMRC refocused. They were subsequently restarted later in 2012.
Scrapped. On 20 October 2015 HMRC announced that it was scrapping BRCs, although checks that were already scheduled will go ahead. The reason given for the cancellation of the scheme is that it wasn’t cost effective and didn’t identify as many problems as expected.
What now? HMRC says that it will continue to strive to ensure businesses improve their record keeping where needed, although it doesn’t state how it will do this.