HMRC business record checks

On 17 December 2010 HMRC announced their intention to roll out a programme of Business Record Checks in the second half of 2011. At present they are consulting with professional organisations regarding the scope of their enquiries. This consultation will be completed and the results published by 31 March 2011.

If your business is selected HMRC staff will visit your premises and ask for access to all your business records. If they feel that there is a significant failure to keep proper records penalties may be charged and additional tax assessments raised.

HM Revenue & Customs are going to use existing legislation to check business records in up to 50,000 cases annually. Businesses targeted will have 250 employees or less and turnover below 50m Euros. (At present exchange rates just over £40m). Checks will begin in the second half of 2011 and HMRC will impose penalties for significant record keeping failures.

Once HMRC are aware that your record keeping is defective this will no doubt trigger visits from a number of their departments. You may get additional PAYE/NIC or VAT audit checks for instance.

Wwe’ve got a another free diagnostic tool on our website, just to check if your records are likely to be OK. It’s at www.hixsons.co.uk. It only takes a few minutes for a lot of peace of mind.

Clearly this is not an issue to ignore. Are your records in shape? Will they pass an inspection? Yet again we have a situation where smaller businesses are faced with additional pressures from the taxman. Unfortunately the threat of a visit is unlikely to go away. Be prepared!

Queens Speech - letter to Santa!

So you need a new law to get pupils a good education? Or one to halve the debts the Government has built up?

It's like saying that I will get up at 7 o'clock every morning - just do it man!

No fiscal Golden Rule has remained unbroken, and now we have the news that borrowing is nearly the same level as this country's GDP. Include unfunded public sector pensions, and its twice GDP.

Which means that spending will be cut, and tax WILL rise. Maybe some inflation too - after all VAT goes back up to 17.5% on 1 January (Happy New Year from Team GB). The highest rate of income tax is already set for 50% from April 2010. Maybe it will go higher yet.

And - to depress us more - analysis of all the recessions in the last century shows us that they last between 47 and 55 months. We, by the way, are at about month 19. Nationwide expects house prices to move on down next year as unemployment drives demand down. More good news.

The next 6 months will be characterised by all the political parties spending most of their time and energy on getting elected, and NOT on sorting this out.

Which mean that businesses who are getting by (just) will be further weakened. Many more will fail, especially in the next 3 months. The remainder will see their tax bills rise.

That is, unless they do something about it - to survive (even grow as some of our clients are doing) and minimise their tax. I have lots of cunning plans!

After all, it's not about cheating the taxman - it's about having enough cash to survive. I'm expecting a busy few months. I just don't want to hear people tell me afterwards - "I wish I'd taken your advice". Take it now!