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.
Committee expresses concern about costs to businesses and April 2018 implementation date
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
Top 25 firm HW Fisher & Co has acquired London firm Rhodes & Rhodes
Top Ten firm RSM has appointed Nick Blundell as its head of corporate tax in Birmingham