HMRC Looking to Raise an Additional £600 Million from Small Businesses

In a Consultation Paper issued by HM Revenue & Customs on 17 December, the Revenue announced that they will be carrying out 50,000 "Business Record Checks" in each of the next four years to enable them to satisfy themselves as to both the adequacy and accuracy of business records maintained by Small Businesses. HM Revenue & Customs has said that they expect these checks to bring an extra £600 million into the Exchequer over four years starting in the second half of 2011.

Businesses who fall short of the expected standards could face a fine of up to £3,000 for each offence.

The checks will be made under the threat of a tariff-based penalty regime for failure to keep proper records with a maximum fine. The maximum penalty will remain at £3,000 each and every time there is a failure to keep proper records but thankfully the imposition of penalties at that level has historically been very rare. However the cynics amongst us might suggest a link between the Revenue's hardening attitude to taxpayers and the fact that:-

50,000 x 4 years = £600 million!

Tax payers therefore have just six months to make sure that their records are all in order and that they can defend themselves if they are one of the unlucky ones.

HM Revenue & Customs have a helpful factsheet describing the type of records that they expect each type of business to maintain. This can ve viewed at www.gov.uk/factsheet/record-keeping.pdf.

January 2011