HMRC has announced that it is abolishing business records checks, a move which the CIOT has hailed as a ‘victory for common sense’. Business record checks are a compliance procedure HMRC has used when it wants to confirm that a business is keeping sufficient information on its income and expenses to produce an accurate tax return. It has been criticised for being ineffective and poorly targeted.
Andrew Gotch, chairman of the CIOT’s Owner Managed Business Sub-Committee, commented that while keeping good records was essential for producing accurate accounts on tax returns, an ‘educative approach’, particularly for small businesses, would be a ‘more sensible way forward’. ‘As HMRC itself acknowledges, this initiative has not proved a cost-effective way of achieving the desired result,’ he said. ‘The evidence is that records are being kept to an appropriate standard by most small businesses in the UK.’
HMRC has announced that it is abolishing business records checks, a move which the CIOT has hailed as a ‘victory for common sense’. Business record checks are a compliance procedure HMRC has used when it wants to confirm that a business is keeping sufficient information on its income and expenses to produce an accurate tax return. It has been criticised for being ineffective and poorly targeted.
Andrew Gotch, chairman of the CIOT’s Owner Managed Business Sub-Committee, commented that while keeping good records was essential for producing accurate accounts on tax returns, an ‘educative approach’, particularly for small businesses, would be a ‘more sensible way forward’. ‘As HMRC itself acknowledges, this initiative has not proved a cost-effective way of achieving the desired result,’ he said. ‘The evidence is that records are being kept to an appropriate standard by most small businesses in the UK.’
