Her Majesty Revenue and Customs will scrap Business Record Checks, which often had been criticized as “cost ineffective” and “poorly targeted”.
Business Record Checks had been a compliance procedure used by HMRC to assure that a business was keeping adequate information regarding its sales and expenses, in order to produce a precise tax return.
As stated by Andrew Gotch, the Chairman of the Chartered Institute of Taxation’s Owner Managed Business Sub-Committee, tax advisers support this initiative; as the past has shown, most of the small businesses in the UK indeed keep the necessary records to an appropriate level.
According to Mr Gotch, this scraping does not equal to laxity on behalf of the HMRC regarding the control procedures.
“It remains crucial for businesses of all sizes to keep records up to date and in good order. This is likely to become even more important as HMRC bring in digital tax accounts, which may require businesses to submit data more frequently.”
– Andrew Gotch, Chairman of the Chartered Institute of Taxation’s Owner Managed Business Sub-Committee
Anthony Thomas, Chairman of the CIOT’s Low Incomes Tax Reform Group has also valued the announcement as “the right decision”, and characterized the procedure as money and time wasting, for the public and the businesses respectively.
Mr Thomas believes that HMRC should focus on an approach which educates businesses to follow the right practices instead of trying to catch them after they appear non-compliant.