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Contractor accountants will be exempt from Business Records Checks

Contractor accountants will be exempt from Business Records Checks

Accountants may be interested to learn that HMRC will not be checking the record keeping abilities of accountancy firms in the future.

The Business Records Check scheme is on hold at the moment while the Revenue reassesses its strategy, but it has confirmed that it will not investigate accountancy firms’ records when the scheme relaunches later this year.

When the Revenue introduced record checking, it was designed to help businesses keep better books and receive more accurate tax bills. However, critics of the scheme say it was unfocused and more consultation was needed. 2,500 businesses, including accountancy practices, have already received a visit from an HMRC inspector under the scheme.

The news that practices had already been targeted came from a Freedom of Information request by Abbey Tax. However, HMRC was unable to confirm how many accountancy practices had been visited.

The Revenue did confirm that it had learnt from its experiences so far that its interventions need to be well targeted and therefore practices will no longer receive Business Records Checks.

Abbey Tax’s senior tax consultant, Guy Smith, said he welcomed the progress HMRC has made in improving its targeting criteria, but there is still much work to be done to establish what constitutes a failure that warrants a fine and when such a penalty should be imposed.

Last year, during HMRC’s pilot scheme, businesses that were found to have inadequate records were told they may receive a follow up visit from inspectors after three months so that the Revenue could satisfy itself that its advice had been acted upon.

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Image: UK Pounds and magnifying glass by Images_of_Money

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