HMRC to review Business Records Check project

Following lengthy discussions with HMRC and the other representative bodies on Business Records Checks the ATT is pleased to report that HMRC have notified the representative bodies that HMRC are to carry out a review of the project.

The ATT has been invited to participate in the review. The review will be open and will consider various options aimed at achieving the original key objective of BRCs, which is to deal with poor record keeping in the SME sector.

The statement from HMRC states:

HMRC agrees to review the Business Records Check project

Following consultation with the representative bodies, HMRC have announced that it has started a detailed review of the Business Records Checks (BRC) project.

HMRC recognise that the launch of the BRC pilots has caused considerable concern to the tax profession and that the project would have benefited from more detailed consultation with tax professionals at an earlier stage. In the light of these concerns, HMRC will undertake a strategic review of the project in consultation with the professional and representative bodies. The purpose of the review is to consider the overall aims of BRCs, examine whether the current approach is the best way of achieving the policy objectives and identify what changes are needed to ensure that the objectives are achieved.

In the meantime HMRC will continue with a limited number of BRC pilots and the results of them will be evaluated as part of the review. Richard Summersgill (HMRC’s Director, Local Compliance) and Naomi Ferguson (Director, Business Customer & Strategy) are jointly sponsoring the review and it will be led by Tracy Kirkham. HMRC will also consult with the professional bodies and other representatives through the Compliance Reform Forum and also with ABAB (the Administrative Burdens Advisory Board). HMRC expect to report initial findings in early 2012.

Given the concerns over possible penalties, HMRC would like to take this opportunity to reassure taxpayers and agents that HMRC will not (except in extreme cases such as where a taxpayer has no records or has destroyed them) be seeking to use the record-keeping penalty provision during the pilots. No such cases have been identified so far.

HMRC and the tax profession share the overriding policy objective, namely to ensure that businesses’ record-keeping meets the necessary statutory requirements and that their records are sufficient to enable a correct and complete tax return to be submitted within the time limits. HMRC are grateful to the representatives of business and the agent bodies for agreeing to work with them on the review and look forward to developing a shared understanding of how the overriding policy objective can be implemented with representatives’ full support.’

Technical Team

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