Business records checks
21st November 2013
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HM Revenue & Customs (HMRC) carries out checks on how businesses keep their records. If HMRC decides to look at your business records, it 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 contacts you by telephone, it will ask you questions about your business to help it 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. It 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. It 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. It will tell you on the call and 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.

A face to face visit will usually take around two hours and, 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. So, you must make sure all the information your advisor supplies to HMRC is accurate.

By David White a Partner in Charterhouse, based in Beaconsfield


About the Author

David W

Member since: 16th May 2013

David White is an equity partner in Charterhouse a practising firm of Chartered Accountants based in Beaconsfield and Harrow. David is Charterhouse through and through having been with them for 30 years...

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