Accountants for contractors might be pleased to learn that HMRC is to review the way it conducts business records checks after MPs and small business groups criticised the initiative.
As part of the initiative, the Revenue will inspect the records of as many as 20,000 small businesses. Any that are found to be keeping inadequate records could be fined up to £3,000.
John Walker, the chairman of the FSB, has criticised the scheme saying that HMRC is still intending to proceed despite worsening economic prospects. He explained that he has expressed his concerns to HMRC on a number of occasions, but although the government says it wants to help small firms, the reality appears very different.
The scheme has also been criticised by Tory MP Priti Patel who said it was persecuting small businesses at a time when they are fighting for survival. She says HMRC is acting diabolically towards small firms when they blatantly let large organisations off paying millions of pounds.
Backbench Tory Anne-Marie Morris pointed out that HMRC used to take a sympathetic view of minor errors, but the ethos has now completely changed and businesses are treated the same regardless of size and resources.
A spokesman for the Revenue has now admitted that the project has caused a lot of concern within the tax profession and would have benefited from more detailed input from tax professionals. HMRC will now have a strategic review of the business records checks scheme, in consultation with representative and professional bodies, he added.
© 2012 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Meridian Filing & Storage by mendhak
