THE TAXMAN’S controversial plan to check small business’ record-keeping has been scaled back, it has emerged.
HM Revenue & Customs will check 20,000 business’ records – down from its original target of 50,000.
Its business plan had included a target of 20,000 record check visits to be completed by March 2012, which has now been reduced on a pro rata basis of 12,000.
However, HMRC described its plan to increase staff working on the check from 30 to 120 – plus the increase to 20,000 checks next year – as part of an ‘extension’ of the scheme.
An HMRC spokesman said: “Currently, having undertaken pilots initially and by building up the numbers in a measured way, HMRC is seeking to develop and refine the BRC approach before introducing it on a larger scale.”
HMRC’s director of local compliance, Richard Summersgill, said: “Good record-keeping helps businesses pay the right amount of tax at the right time, thereby potentially avoiding interest and penalties.
“Adequate records give businesses a clear idea of their trading position and profitability, allowing them to make business decisions and adjustments to ensure survival and success. And where a check has shown a business keeps adequate records, it gives HMRC a greater degree of assurance as to the likely accuracy of its tax returns.”
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
Does Darwin's theory apply to taxation? Colin ponders...