ACCOUNTANCY FIRMS will be spared the ignominy of having the taxman check the quality of their business records.
HM Revenue & Customs has revealed in a Freedom of Information request that it will not check firms’ records when it relaunches the records check scheme later in the year.
The Business Records Checks Scheme has been put on hold after criticism from advisors and small business representatives. They voiced concern that the scheme, which intended to improve record-keeping – and therefore more accurate tax bills – through HMRC checks, was unfocused and required more consultation.
Practices had been visited as part of HMRC’s 2,500 visits.
The FoI request by Abbey Tax into the number of visits to practices could not be completed by HMRC due to the amount of time it would take to check its own records.
However, the letter from HMRC’s FoI team states that “we have sought to learn from our experiences to date to ensure our interventions are well-targeted, so we would not now carry out a BRC on an accountancy practice”.
Guy Smith, senior tax consultant at Abbey Tax, said: “This is a promising start from HMRC as it seeks to improve its targeting criteria for selecting businesses suitable for Business Record Checks. However, there is a lot of work still to be done in deciding what constitutes a significant failure deserving of a record keeping fine and when that fine should be levied.”
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Signed into law by president Barack Obama in 2010, the Dodd-Frank legislation has tightened regulation of the US financial system
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal