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HMRC are to once again revamp their business records check (BRC) programme, putting greater emphasis on educating taxpayers.
HMRC are to once again revamp their business records check (BRC) programme, putting greater emphasis on educating taxpayers.
BRCs have been the subject of controversy since they were announced in January 2011. They were put on temporary hold a year later, and then relaunched last November to immediate criticism.
The intention of the compliance initiative was to scrutinise the paperwork of up to 50,000 businesses annually and impose penalties of up to £3,000 for substandard record-keeping. But no firms have faced fines, having all improved their standards following visits from Revenue officials.
New ways of using the checks will be considered from next month by BRC teams in the Edinburgh, Glasgow, Leeds, Bradford and Stockport areas, who will evaluate risk processes and cost-effectiveness. Many agents already do much to improve clients’ paperwork, said the tax department, which also plans to work with professional bodies to review the benchmarks of good record-keeping.
Existing checks for businesses not in the areas where BRC will be redeveloped will continue to face checks as usual: an organisation that received an HMRC letter dated on or before 23 October 2013 will be asked to complete an initial telephone questionnaire.
Firms facing first visits will be offered the alternative of taking advice by the Revenue’s business education and support team. Follow-up visits will go ahead as planned.
“The BRC programme was always meant to be an education exercise and it seems from their new focus, that the education side is what the taxman will be concentrating on in future,” said Mike Down, head of Baker Tilly’s tax risk and investigation management team.
“Quite where this leaves the expected £600m of extra revenue that HMRC anticipated would result from their BRC programme is unclear,” he added.
