A DECISION by the taxman to postpone checks of small businesses’ records and make future inspections more targeted has been welcomed by the Chartered Institute of Taxation (CIOT).
The CIOT said that the change to the pilot scheme of business record checks – which has been criticised for putting excessive administrative burdens on small and medium-sized businesses – would help improve business records.
“Tax advisors are strongly supportive of efforts to improve record-keeping by business, but up until now HM Revenue and Customs has been going about it the wrong way, endeavouring to eradicate error by increasing burdens disproportionately,” CIOT president Anthony Thomas (pictured) said in a statement.
“A good programme to improve business record-keeping will involve HMRC and tax advisors working together to educate businesses about good practice and support them in improving their systems, as well as warning about the risks of poor record-keeping.”
Nearly 2,500 businesses’ records have been checked by HMRC since the pilot scheme’s launch in April 2011. About 28% of businesses visited had some issue with their book-keeping, while an additional 11% had issues “serious enough to warrant a follow-up visit”.
HMRC’s review of its pilot caused concerns among advisors, particularly about the speed of the introduction of the scheme and its scope.
The CIOT said it met HMRC in April last year to raise a number of concerns about the “mis-targeting” of the scheme and an “inadequate” consultation process.
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government