THE BUSINESS records checks programme operated by HM Revenue & Customs is running at its highest level since its introduction in 2011.
The number of investigations rose to 5,515 in 2013/14 from 3,431 in 2011/12 – an increase of 60%, according to tax investigations specialists PfP.
Yield is expected to follow suit, rising from £13m in 2012/13 to £49m in 2013/14.
HMRC started the programme to identify businesses with poorly-kept records, which might lead to the underpayment of tax.For businesses with inaccurate records there is a potential £3,000 fine on top of any unpaid tax, interest and penalties.
HMRC has scrapped its more ambitious plans to visit up to 50,000 businesses per year but the number of actual onsite inspections taking place is still increasing.
In February 2012, the record checking programme was put on hold and sent for review after it received criticism from accountancy firms and business groups, but after a seven-month break the checks began again in November 2012.
The outcome of the review was to attempt a more targeted approach for the checks because it showed that most businesses in fact kept appropriate records. However, the proportion of checks that found nothing significantly wrong with businesses’ records has actually increased compared to before the review, from 64% to 73%, PfP said.
PfP managing director Kevin Igoe said: “After the review HMRC said it would try to reduce the burden on compliant businesses by using a more targeted approach. However, the majority of those being reviewed are finding that their business records are sufficient.”
Original article written by and sourced from – accountancyage.com