HMRC to axe Business Records Checks

HM Revenue and Customs (HMRC) has confirmed that the much-maligned Business Records Checks (BRC) initiative is set to be axed in a move that industry officials claim is a “victory for common sense”.

The Chartered Institute of Taxation (CIoT) believes that HMRC knows that BRC has not proved “cost-effective”, despite being trialled, suspended and twice revamped in a bid to streamline the process.

The overall aim of the BRC initiative has been queried too: although HMRC ran a record number of business checks in 2014, three-quarters of firms targeted were found to have adequate records.

The CIoT said that this surprisingly high figure came in spite of “efforts by HMRC to identify businesses at ‘high risk’”.

An HMRC memo to tax bodies said: “HMRC has decided to wind down the business records checks initiative.

“BRC has positively encouraged businesses to keep better records.

“We have found that we were contacting more compliant customers than expected, because it’s proved more difficult than originally anticipated to select those customers who would benefit from a visit.”

Andrew Gotch, of the CIoT, welcomes the decision to save public money and aid businesses – many of whom are time-poor already.

“Pulling the plug on Business Record Checks is certainly the right decision,” said Gotch.

“A lot of public money and businesses’ time has been wasted.”

Mr Gotch does add a warning that, although HMRC has made the “common sense” decision to end the initiative, it does not mean companies can simply revert to being complacent about their paperwork.

“Keeping good records is essential. This is likely to become even more important as HMRC bring in digital tax accounts, which may require businesses to submit data more frequently.”

For limited companies and other HMRC customers currently involved in a BRC, if they have already received a letter from the tax authority, they will still be required to go through the telephone questionnaire.

At the commencement of the questionnaire, the customer will be advised whether or not a visit by a BRC official is necessary – if it is not, online guidance on record-keeping will be offered.

HMRC added: “If customers have been advised that a visit is required and has still to be arranged, the visit will be booked shortly.

“Where a visit has been booked or customers are awaiting a follow-up visit, then these will still continue.”

Date published 26 Oct 2015 | Last updated 26 Oct 2015