HMRC & Business Records Checks
Charterhouse is able to offer expert tax advice in all matters relating to HM Revenue & Customs (HMRC) and corresponding tax queries. We pride ourselves on being tenacious and determined on behalf of our clients. In this article we offer sound advice on business record keeping for tax purposes
HMRC carry out checks on how businesses keep their records. If HMRC decide to look at your business records they will usually contact you by telephone. Businesses need to keep records to complete their tax returns correctly, and pay the right amount of tax at the right time to avoid interest and penalties.
When HMRC contact you by telephone they will ask you questions about your business to help them work out if you are keeping the business records you need to meet your legal responsibilities. The telephone call should take between 10 and 15 minutes.
From the replies you give the HMRC officer:
- HMRC will assess whether you are likely to be able to submit an accurate tax return from your records. They will tell you during the call and will confirm it in writing, and no further action will be taken at this stage.
- HMRC may feel you could do with some additional help and support to put your records in order. They will tell you on the call and pass on your details to HMRC's Business Education and Support Team who will contact you with information about self-help guidance and training.
- HMRC may decide you are at risk of keeping inadequate records in which case you would need a face to face visit. They will tell you on the call. Your details will be passed to the visiting booking team who will contact you to arrange a suitable date and time for the visit, and confirm that in writing.
If HMRC feel you need a face to face visit, they will contact you to agree a date and time. The visit will usually take around two hours.
On the visit the HMRC officer will:
- ask you to explain how you run your business
- note how you keep your business records
- check a sample of your current business records - usually your records for the last four months and arrive at a decision as to whether your business records are adequate or not
If your records are adequate the visiting officer will tell you at the visit and then confirm it in writing a few days later. This will be the end of your business records check.
If the visiting officer finds your record keeping needs improving they will discuss this with you and your agent, if they are at the meeting. The officer will then advise what you need to do to make your records adequate and what will happen next.
Using a professional advisor
It is not essential, but if you have an accountant or other professional advisor, you will be able to invite them to attend the visit.
If you do not have an advisor you can use form 64-8 if you want to authorise one to speak to HMRC about your tax affairs. Even if you have a professional advisor, you're personally responsible for your own tax affairs. You must make sure all the information your advisor supplies to HMRC is accurate.
Charterhouse is a provider of cutting edge tax solutions with clients in the Home Counties and throughout the UK. One in four of our staff work full time on tax matters and we continually invest in researching and developing new tax solutions ahead of the crowd.