Business Records Checks
Following a successful pilot phase, HMRC are also refining and extending its single compliance process – Business Records Check (BRC). Our white paper: 'Are you ready for Business Records Checks?' provides tips on how to be well prepared. You can download it from here.
Depending on your circumstances, this may begin and end with a single pre-arranged phone call to go through a questionnaire about how you keep your financial records. It could lead to a visit by HMRC to conduct a closer look at your recordkeeping and to observe some samples.
This may result in:
- All clear – recordkeeping found to be adequate – confirmed in writing.
- Specified improvements requested within 3 months – supported by HMRC.
Following this there are potential further visits and fines applicable in case of continued recordkeeping inadequacy.
The advantage of good records management
Poor recordkeeping is the root cause of around 40% of business tax underpayment cases among SMEs. Keeping records up to date helps you to manage cash flow effectively and maintains good credit. Examples of where advantages can be gained include:
- Monthly correction and reconciliation of accounts discrepancies – demonstrates serious commitment to a firm grip on finances.
- Separate record of fixed assets (cars, PCs etc) – their asset numbers are easier to find than a single line item buried amongst uncountable supplier invoices.
- Comprehensible history of records by year – HMRC checks are interested primarily in recent history, so highlight or separate it.